• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Investing

GoPro stock price is a bargain for the right buyer

by August 14, 2024
written by August 14, 2024

GoPro (GPRO) stock price collapsed to a record low this week, a tragic situation for a company that was highly popular among investors and traders. It has dropped by more than 65% this year and by over 70% in the past five years. It remains over 90% below its all-time high.

The downfall of GoPro

GoPro is a company that dominates the wearable camera industry. It is a pioneer company that changed an entire industry and is still popular among fans. 

In the past few years, however, demand for its products has waned and some analysts believe that the company could go out of business in the next few years.

To see how low GoPro has fallen, you just need to look at its income statement, which shows that its revenue dropped from over $1.19 billion in 2019 to $1 billion in 2023 and $931 million in the trailing twelve months. 

It has also moved from being a profitable company to one that made a net loss of over $393 million in the trailing twelve months. 

The most recent financial results showed that GoPro’s revenue dropped by 23% in the last quarter to over $186 million. Its net loss for the quarter was $48 million while its gross margin thinned to 30.5% from the previous 31.4%.

GoPro’s revenue dropped during the quarter even after increasing its sales and marketing spend from $39 million to $41 million during the quarter. 

GoPro’s key issues

GoPro’s business faces several issues that explain why it is in trouble. First, it is a one-product company. This means that the company makes most of its money from its Hero Black camera, which starts at $249. Its most expensive camera goes for about $600. It comes with the ability to shoot better videos than its other versions.

Therefore, while GoPro’s cameras are still in demand, most of its buyers see no need of upgrading them unless then they are broken. This is unlike other hardware companies like Apple, which are constantly releasing new versions of its smartphones. 

GoPro has tried to venture into other products in the past. For example, it launched the Karma drone a few years ago and exited the business in 2018 as it faced substantial competition from the likes of DJI and other companies like Autel Robotics, Parrot, and Skydio.

GoPro also launched products like Omni, remote controllers, GoPro Fetch, and GoPro Omni only to discontinue them.

To some extent, being a one-product company has its benefits as it lets companies to refine their strategies and boost their margins. In GoPro’s case, the main challenge is that people don’t replace them often and there are signs that demand is falling. 

GoPro has also worked on becoming a subscription company. Its Premium service costs $50 a year while Premium+ goes for $100. Plus lets users auto-upload their GoPro videos, access unlimited cloud storage for their footage, a big discount for its accessories, and synced mobile and desktop editing. 

The plus offer has all the solutions in the premium package and 500 GB of cloud storage for non-GoPro footage. There are signs that the subscription business is no longer growing as the revenue dropped by 35% in the second quarter to $49 million. 

GoPro would be a good acquisition target

Fundamentally, I believe that GoPro is a good company with beloved products and a leading market share in the industry. However, it would make a good acquisition target either by a company with more products or private equity. 

Garmin is one company that would make sense to own GoPro since it sells similar products in the sports and fitness industries. A company that buys GoPro at the current valuation would be getting it for free. 

Looking at its balance sheet, we see that GoPro has over $133 million in cash and equivalents and $97 million in inventories. Its current assets stand at over $351 million against $238 million in current liabilities, giving it a working capital of $113 million. GoPro’s total debt stands at just $92 million, which can easily be covered by its cash balances. 

The main challenge for GoPro is that it is still losing money as its loss stood at $47 million in the second quarter. In this case, there are ways to save these funds and make it profitable since the company spent $46 million in R&D, 41 million in sales and marketing, and $14.9 million in general and administration. 

Most of these funds could be cut. For example, a company like Garmin can integrate functions in R&D and G&A with its existing operations and slash its operating expenses by more than half. 

What next for the GoPro stock?

The daily chart shows that the GPRO stock price has been in a strong downward trend and is now sitting at its record low. It has remained below all moving averages and recently dropped below the key support at $1.29, its lowest swing in July. 

By moving below that level, it invalidated the double-bottom pattern. Therefore, without a buyout, the stock will likely continue falling and could crash below $1.

The post GoPro stock price is a bargain for the right buyer appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
3 things Brian Niccol will do to turn around Starbucks
next post
Wells Fargo reduces price target on Dell to $150: Time to hold or sell?

related articles

Asian markets close: Nikkei, Kospi down; Sensex closes...

May 19, 2025

Qualcomm unveils AI chips for data centres with...

May 19, 2025

Best crypto to buy now: Bitcoin Pepe leads...

May 19, 2025

JPMorgan cuts Netflix rating, citing balanced risk-reward post-rally;...

May 19, 2025

Bitcoin ETF open interest dips 5% to $29.47B...

May 19, 2025

US stocks slip in the red on Monday:...

May 19, 2025

Should Klarna IPO remain on watch list after...

May 19, 2025

Why this brokerage downgraded UnitedHealth’s rating to ‘hold’

May 19, 2025

Nvidia opens NVLink Fusion ecosystem, expands Taiwan footprint...

May 19, 2025

Cathie Wood says Trump’s tariffs could unlock tech...

May 19, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • State treasurers push for divestment from China citing ‘red flags’ regarding CCP control

    November 1, 2024
  • Long MQ: Marqeta Inc. Q3 Earnings, 30% TPV Growth, New BNPL Product, and Strong Rebound from Key Support at $3.50 Signal Long Opportunity

    November 7, 2024
  • Air Direct Capture – Reducing CO2 from the Atmosphere

    March 20, 2025
  • 6 populist leaders facing lawfare around world

    April 2, 2025
  • Hillary Clinton celebrates decades of marriage to Bill after being ‘deeply hurt’: ‘We just have a good time’

    September 22, 2024

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 3

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 4

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (4,720)
  • Investing (624)
  • Stock (772)

Latest Posts

  • USDCAD and USDCNH: USDCAD is moving to a new monthly high

    July 23, 2024
  • Democrats told us Biden was razor sharp. Wait till America gets the Kamala Harris spin

    July 22, 2024
  • With 26 days until voting starts, ‘election season’ kicks off sooner than you think

    August 11, 2024

Recent Posts

  • Harris campaign plagued by surrogates’ gaffes: ‘Colossally inept campaign’

    October 23, 2024
  • Trump, Harris neck and neck in battleground states with under 48 hours until Election Day, polls find

    November 3, 2024
  • India’s market cap falls below $4 trillion: what’s behind the slump?

    February 14, 2025

Editor’s Pick

  • FBI informant who made up Biden bribe story gets 6 years in prison

    January 9, 2025
  • ‘Down to the wire’: Steve Scalise predicts House control may be decided today

    November 7, 2024
  • After Trump’s tariff threat, Mexico says Canada wishes it ‘had the cultural riches Mexico has’

    December 3, 2024
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock