- GoPro has failed to meet expectations post-IPO.
- Product and software developments due for launch this year could trigger a resurgence.
- Keep an eye on GoPro stock, but this might not be the best time to buy.
GoPro's IPO brought with it much excitement among investors. GoPro (NASDAQ:GPRO) was a young, fresh company with an action camera product which had taken the world by storm. However, in recent years, copycats have sprung up, and due to the fact that GoPro's management seem to have little interest in extending the brand, its stock has suffered, going on a general decline.
However, GoPro's brand holds a special place in the minds of consumers. As a result, this provides a launch pad for GoPro to diversify its product range, and increase revenue. In fact, there is a talk of GoPro producing its own drones. This is good news for investors, but might be regarded as too little too late. The drone industry is growing, and other companies have generated significant revenues by making their products GoPro compatible. It is this hesitancy by the management of GoPro to introduce related products and services, which is causing some hesitancy among investors with regard to buying GoPro stock.
GoPro's IPO was met with much hype, with some news outlets comparing the company to Apple. This played a part in the stock price shooting from $36.97 to $86.97 in just four months. However, lacklustre sales figures combined with a lack of significant product upgrades has triggered reduced consumer and investor interest.
Despite all this, it is still a smart idea to buy.
You see, just as GoPro's stock has "flatlined", it has some interesting hardware and software slated for release. GoPro's first camera drone is slated for release sometime in 2016, and the company acquired two top mobile editing apps at the end of February. Moreover, the upcoming GoPro Hero 5 is set to be its biggest upgrade yet. It has to be. The sales figures for this year will mend or break its relationship with investors.
GoPro's haste to innovate and its brand image leaves me feeling that it is going to bounce back. Sometimes, a company has to have its back against the wall in order for us to see what its management is truly capable of.
Interestingly, GoPro also has an interest in a new product division: virtual reality. The excitement surrounding this new growth driver has reached a fever pitch with companies such as Microsoft and Facebook pouring billions into getting a good start. GoPro's CEO mentioned that it has "several products in development that will position GoPro as a leader in VR.”
GoPro carries significant bearish sentiment among the investor community. This is exemplified by the fact that short selling of GoPro stock has increased. And this goes to show the reduced confidence some investors have in GoPro. This isn't unwarranted, considering that recent earnings figures have been poor. However, this provides an opportunity. As previously stated, GoPro is set to bounce back this year. Therefore, if you don't own GoPro stock it is worth purchasing when we hear more about their upcoming launches.
In conclusion, GoPro is a company which has suffered after falling short of post-IPO expectations. A quick glance at the news stories, and you would think that this is a company on life support. However, when we delve deeper, it becomes clear that it is due for a resurgence. For instance, GoPro's total assets has increased year-on-year since 2012.
It is far from perfect; however, GoPro is a stock worth keeping a close eye on for a bounce back later this year.