Coverage Initiated: Sell $25
GoPro's stock has had quite a ride this year. While we really liked the stock when it debuted last year, we held off setting any targets. When GoPro broke the $70 mark we decided to put on the breaks and sell off. While watching GoPro's performance over the past year we have to major concerns:
1. Lack of product innovation
2. Odd focus on becoming a media company
GoPro still has huge promise as a camera company. We believe that the company doesn't have a clear vision of where it is going. GoPro needs to focus on the commercial aspect of their business as we believe that they have the consumer market locked down and saturated. Building relationships with companies like 3D Robotics and DJI to create integrated drone camera hardware. Fostering their products to focus around drones will insure a great future for GoPro. Only recently has GoPro started to pay attention to the commercial market with, 360 set-ups and live video receivers.
GoPro has been able to promote videos, primarily on youtube, and in turn inspire people to buy their cameras and go on adventures. Instead of focusing on making more fantastic products to advertise, GoPro has started to focus on their "media empire". This new focus has almost no chance of creating any significant streams of revenue besides becoming a form of advertising (what it is currently).
Until GoPro proves that it can successfully change its' product line to attract more consumers, they will continue to see a decline in investor interest.