This Could Put a Bottom Under GPRO Stock
Wearable camera developer GoPro, Inc. (NYSE:GPRO) saw the worst of its days on Friday after its supplier Ambarella reported that the former was facing an inventory pileup. GPRO stock hit its all-time lows on Friday and the downtrend is continuing.
Now, GoPro’s most recent quarter was really weak and company management slashed its next-quarter guidance. All of this delivers a bleak outlook on GPRO stock. But wait, there’s still a way the company might be able to turn itself around.
From B2C to B2B
GoPro’s last season did exceptionally well. However, the latest “Hero4 Session” camera didn’t pull flattering sales. GoPro’s management cited an underfunded marketing campaign to be the biggest cause of poor sales and rightfully so; the company needs a stronger and more targeted marketing campaign to rebuild its brand image.
This is where GoPro could learn a thing or two from Fitbit, Inc. (NYSE:FIT), another company in the wearable technology industry. Fitbit has bolstered its position in the industry primarily through business-to-business (B2B) marketing. Average B-schoolers must understand this concept.
Simply put, B2B marketing is selling products to other businesses instead of directly to individual consumers. Fitbit has employed this strategy to reach out to other big corporations, including Target, Bank of America, and 70 other big companies to buy its products in large quantities and give away to their employees as part of a corporate wellness program. Despite stiff competition in the fitness wearables industry, from the likes of Apple and Microsoft, Fitbit has very cleverly pitched the wellness program to big corporations to drive in bulk sales for its products.
GoPro has been lacking greatly in this department. GoPro has two great products in the pipeline that can help it bolster its revenue, should its marketing department come up with the right strategy. The company’s virtual reality (VR) camera, the “Odyssey,” and its drone camera that’s currently in the making are two promising future technologies to bet on.
Both VR and drone cameras are being touted as the future of technology. All major technology companies, including Google, Facebook, Apple, and Amazon, are betting on either one or both of the two technologies with their own lineups of products. If GoPro doesn’t move fast, the space will soon get too crowded to win a meaningful market share.
Both VR cameras and camera drones are expected to have a great market in the broadcasting industry in the coming years. Big news corporations will likely be posting strong demand for the two kinds of cameras for news and event coverage. Additionally, as Facebook has recently introduced 360-degree video advertising on its platform, GoPro’s 360-degree VR cameras are likely to receive a great reception from big corporations looking to shoot VR ads.
Likewise, drone cameras have a promising market in the security and surveillance industry.
The best way forward for GoPro is to seek bulk orders from companies active in these industries by pitching its products ahead of time.
The Bottom Line on GPRO Stock
GoPro is fundamentally a great company with great products. Financially, the company is strong with a solid cash position and a clean balance sheet, with no significant debt.
What it has been missing is corporate direction. The lack of a focused marketing strategy has weighed heavily on GoPro stock, but the fact that company management recently acknowledged its shortcomings bears a promising sign that they are willing to work on turning it around.
The bottom line: GPRO stock is looking dirt-cheap at current lows.