Will 2017 be anything different for GoPro Inc (NASDAQ:GPRO)? Here’s what, you should know before you make a move for GPRO stock.
– 2017 is a make-or-break year for GoPro after it failed to successfully expand its core offering last year.
– GoPro share price is down more than 50% in last one year, but is it too risky to call this ‘the bottom’?
– Increased competition from Snap Inc. and advancement of smartphone cameras provide the biggest threat to GoPro’s future.
It is safe to assume that 2016 is a year that GoPro Inc (NASDAQ:GPRO) and its investors would want to forget. GoPro’s share price tumbled more than 50% in 2016 not least because the company was unable to meet analyst sales expectation for its products – mainly action cameras – and its push to expand beyond its core business of action cameras were somewhat unsuccessful. While, the price trend and increasing level of short interest point toward more downward pressure in the near-term, there are three key things to look out before deciding to expose your portfolio to GPRO stock.
So, many investors are speculating that 2017 represents a make-or-a-break year for the tech company to prove whether it’s first mover advantage in the action-camera market is finally out of runway as competition heats up or whether the woes of 2016 was the ultimate wake-up call. Albeit an expensive wake-up call, the company needed to get back to focussing on its core business after diverting its attention to the somewhat unprofitable entertainment division. (See Also: After Losing Half Its Value, Is GoPro Inc (GPRO) Stock Still A Buy Going Into 2017?).
GoPro HERO 5 & Karma Drone – GoPro’s Marquee Products to the Rescue?
Much of GoPro Inc (NASDAQ:GPRO)’s recent woes have been attributed to the performance, or lack thereof of its drone device, ‘the Karma’, which was expected to energize the company’s top-line growth as it was released in time for the holiday season but was promptly recalled following mechanical failures.
More importantly, a move into the drone market was seen as a reasonable avenue to diversify its revenues and expand its offering beyond its core business of action cameras, as the drone market is expected to surge to $4.2 billion by 2025. Fortunately, the release of GoPro’s Hero 5, a product in its action camera segment, which generates the majority of the company’s revenues appears to be showing robust performance.
Based on internal data, GoPro’s Black Friday camera unit sales was up more than 35% year-over-year at leading U.S. retailers. Thanksgiving through Cyber Monday sales of camera units at GoPro.com was up approximately 33% year-over-year.Whilst this is encouraging, many speculate that the company will fail to meet Q4 sales projection, as supply issues have caused production to stall in what is a critical sales period. Revenues for Q4’16 are expected in the range of $600-650 million.More importantly, investors eagerly await developments concerning the re-launch of its Karma Drone, after CEO, Woodman, revealed that the ‘root cause’ had been identified and resolved.
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