What happened to the plunging GoPro stock price?

April 18, 2024 08:03 AM PDT | By Invezz
 What happened to the plunging GoPro stock price?
Image source: Invezz

GoPro (NASDAQ: GPRO) stock price is on track to drop for four straight weeks as concerns about its growth continue. It has plunged to the record low of $1.78, giving it a market cap of over $266 million. At its peak, the company had a market cap of over $2.70 billion.

No next big thing

GoPro, one of the best hardware companies in the United States, is going through intense pressure as its sales slow.

This view was confirmed when the company published its last financial results. Its revenue came in at $295 million in the fourth quarter, down from $321 million in the same period in 2022.

Its annual revenue figures have also been moving in the wrong direction. It had revenues $1 billion in 2023, down from $1.1 billion in 2019. Analysts expect that its revenue will be $1.01 billion this year and $997 million in 2025.

At the same time, its margins have not been doing well. Its gross profit margin was 41.3% in Q4’21 and 34.4% in Q4’23.

GoPro is facing a big problem because it is a one-product company. History shows that most hardware companies that succeed sell a few products. In addition to the iPhone, Apple also sells the Apple Watch, MacBook, and iPad.

Similarly, Garmin sells products like smartwatches and products for sports and fitness, automotive, marine, and aviation industries. Xiaomi sells smartphones, robots, and other items.

GoPro, on the other hand, sells wearable cameras, which are wildly popular. The problem with this is that these cameras last a long time and users rarely replace them. 

On the positive side, the company has a subscription service that provides features like cloud storage, photo editing, and live streaming. The subscription and service segment brought in $25 million in revenues in the fourth quarter.

GoPro has attempted to diversify its business in the past. Its most ambitious project was its drone business, which ended after the company faced substantial competition from DJI. 

Therefore, I believe that the company faces major headwinds in the coming years. On the positive side, the company has a strong balance sheet. It has over $227 million in cash and $92.6 million in long-term debt. That gives it room to improve its business.

GoPro stock price forecast

GoPro stock

GPRO chart by TradingView

The weekly chart shows that the GPRO stock price has been in a freefall after peaking at $13.75 in 2021. It has now crashed and become a penny stock. Most recently, it has moved below the crucial support level at $2.0, its lowest swing in March 2020. 

The stock has plunged below all moving averages while the Average Directional Index (ADX) has risen above 40. ADX is a popular indicator that measures the strength of an asset.

Meanwhile, the Relative Strength Index (RSI) and the Stochastic Oscillator have moved below the oversold level. Therefore, the outlook for the stock is bearish, with the next point to watch being at $1.50.

The post What happened to the plunging GoPro stock price? appeared first on Invezz


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations, and video (Content) is a service of Kalkine Media LLC., having Delaware File No. 4697309 (“Kalkine Media, we or us”) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.


Sponsored Articles


Investing Ideas

Previous Next