GoPro Stock Trading Below IPO Price
Someone up above must really dislike GoPro, Inc. (NASDAQ:GPRO), because 2015 has not been kind to GPRO stock. Of course, by “up above,” I mean the top trading floors of Wall Street, where the real market consensus is formed. The tide of conventional wisdom has turned against GoPro, but that doesn’t mean it won’t reverse again.
After all, GoPro’s stock is so successful, it deserves its own Hallmark card. Who could have imagined that the camera business was ready for disruption? In an age where every smartphone carries a pretty decent camera, why would anyone buy a standalone one?
GoPro found the answer to that question and in doing so, it untapped an entirely new market to fuel the growth of its stock. Every adrenaline junkie gravitated to GoPro cameras for their sheer usability and durability. GoPro became a phenomenon seemingly overnight and investors clamored to get their hands on its products. But then GoPro ran into legal troubles and a few bad quarters, decimating the stock and cutting the company’s outlook as it heads into 2016.
GoPro stock has fallen nearly 70% this year. To state the obvious, things don’t look good for the camera company, but I think the pessimism will be short-lived. Over the next 12 to 24 months, I see GPRO stock recovering to $50.00, $75.00, or even $100.00 per share.
Why GPRO Stock Could Rebound
You often hear investors talk about Steve Jobs, Mark Zuckerberg, or Elon Musk as examples of great founders/CEOs. As a result, the firms get an extra bit of goodwill from markets that allow them to expand and weather a few bad quarters.
GoPro doesn’t get that same level of respect, even though it has a pretty talented founder/CEO itself. Nick Woodman was on a surfing trip when he realized there was space in the market for an action-oriented camera, started GoPro and has proven he is more than just an ideas man. By using his skill and intellect to pull it off, he made GoPro a world-famous company. The video quality of GoPro’s product line is indisputable and the company’s marketing strategy was pure genius.
The early success of GoPro’s stock on the charts was built on such classic videos as “The Lion Whisperer,” which showed a man named Kevin Richardson hugging and playing with grown lions in the African savannah.
All of the above factors are still a part of GPRO stock’s value.
Despite that, GoPro fell out of favor with Wall Street. GPRO stock’s decline has been dramatic, showing that investors think the end of GoPro is near. I simply don’t buy it.
GoPro just forged a partnership with Facebook, Inc. It has exclusively released 360-degree videos on Facebook, which allow users to change the perspective from which they’re watching the video. Yet GPRO stock fell almost nine percent on Wednesday, November 18.
Chart courtesy of www.StockCharts.com
The 360-degree videos are specifically designed for Facebook’s “Oculus Rift” virtual reality (VR) headset, but they can also be viewed on a normal screen. VR is going to be the next big thing in entertainment, opening an enormous revenue stream for both Facebook and GoPro, meaning GPRO stock could soar. (Source: “GoPro Odyssey VR camera will cost $15,000, arrive in November,” Mashable, September 8, 2015.)
GoPro Stock Could Strike Big with Virtual Reality
Facebook is engineering the device for virtual reality, but everyone else can make content for the Oculus Rift platform. However, all those content, developers will need hardware for filming virtual reality content and that’s where GoPro comes into the picture.
A strong tailwind for GoPro stock is its new camera, the “Odyssey.” The new camera is targeted towards people making video content for VR or 360-degree video platforms. It has enough cameras to capture video in all directions and is priced at around $15,000.
By tapping into a more commercial market, GPRO stock could get a lift off higher margins and increased revenue. All in all, the future looks bright for GoPro.