Is GoPro stock a buy? GoPro has gone from one of the most loved stocks post IPO to one of the most hated stocks on Wall Street. GoPro had an IPO price of $24 in June of 2014 and surged to $86.97 a share by October of that year. GoPro stock fell to $40 a share in March of 2015, rallied to over $60 in August of 2016 and fell into a violent downtrend since then. GoPro bottomed out at $7.24 a share in March of 2017, roughly 8.3% of what it was back in June of 2014. As of March 24th, GoPro short interest is 32%, investors are bearish on this stock. Many investors bought in during the recent dip in March after the third round of layoffs was announced. Also, Citi analysts upgraded GoPro from a Sell to Neutral on the opinion that revenue growth would stabilize and they wouldnât need a line of credit to stay afloat. Why GoPro Stock Crashed: 1. Competition emerged in the action camera market. 2. The overall market became saturated. 3. Existing GoPro products have a long life, upgrades arenât necessary. 4. Improvement of smartphone cameras has hurt camera companies across the board, including GoPro. 5. GoPro made false promises of becoming a media company. 6. GoPro fumbled in the 360 degree camera market with the $5,000 Omni and $15,000 Odyssey virtual reality cameras. 7. GoPro fumbled with the release of the Hero 4 Session camera as it was overpriced, leading to two repricing efforts. 8. In late 2015, GoPro approved a share buyback at an average price of $23.05 a share, wasting about $36 million. 9. The Karma drone launch sucked, immediately followed by a recall. 10. They are developing new uses for existing action cameras instead of expanding their business into other areas. Some investors are bullish on GoPro because they believe that the downsizing will stabilize the business and help them achieve profitability. GoPro has a low enterprise value to share ratio. Limited downside potential makes GoPro a potential target for a buyout. Logically, it might make sense for Apple, Garmin or DJI to buy them out. However, many see a problem with the recent downsizing efforts. This is expected to result in slowing innovation, less brand presence for GoPro and an increase in quality control efforts as seen with the Karma drone launch. Their slow response to the standalone 360 degree cameras and virtual reality glasses is expected to get slower. GoPro is in no position to compete with other action camera companies, drone companies or the smartphone camera technologies. Here is my opinion of GoPro stock. The GoPro VR cameras are way too expensive, and the 360 degree cameras developed by competitors have already made them obsolete. GoPro has no future in virtual reality. There is serious competition in the drone market. The GoPro Karma drone launch was a flop as a result of a delayed release, pricing conflicts with retailers, supply chain issues, a recall and and mixed reviews of the drone. DJI, on the other hand, is crushing it in the drone market. GoPro seems to be a one trick pony with the action cameras. Smartphone cameras are becoming more capable and making standalone cameras obsolete. The recent downsizing at GoPro will likely hinder growth and innovation. Lastly, if someone wanted to buy them out, they likely would have as the enterprise value has fallen below $1 Billion. As they say on shark tank âFor that reason I am out.â I am not going to be investing in GoPro. Website http://www.ryanoscribner.com Follow me on Twitter! https://twitter.com/RyanOScribner Facebook! https://www.facebook.com/ryanoscribner/ Personal Fitness Coaching http://www.ryanoscribner.com/shop Related Videos: I went All in Gobroke!!! Jeremy Gone Crazy! https://www.youtube.com/watch?v=YkmDOvkoQ0U Gopro is NOT Fitbit https://www.youtube.com/watch?v=QEsaqLe49Yw Related Articles: Investors Are Betting Big Against GoPro Stock -- Are They Right? https://www.fool.com/investing/2017/03/06/investors-are-betting-big-against-gopro-stock-are.aspx Better Buy: GoPro, Inc. vs. Garmin https://www.fool.com/investing/2017/04/10/better-buy-gopro-inc-vs-garmin.aspx Is GoPro Inc. Stock a Buy After Its Earnings Sell-Off? https://www.fool.com/investing/2017/02/22/is-gopro-inc-stock-a-buy-after-its-earnings-sell-o.aspx GoPro Stock Summary http://finance.yahoo.com/quote/GPRO?p=GPRO If this video brought value to you, please leave a like! If you are looking to find out more about anything I discussed, drop me a comment or contact me on Twitter. Subscribe to be updated on my journey through life!
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