GoPro Inc (NASDAQ:GPRO), the action camera manufacturer, has had a pretty tough time over the past few years. GPRO stock plunged by as much as 95% since 2014 and is currently a penny stock. That being said, the stock started off 2019 with a promising rally and hit $7.55 a share at one point in May.
However, it experienced a steep drop again and is now trading at $4.35 a share. Hence, it is perhaps important to figure out whether GoPro stock could be readying for a significant move in the near future.
Production Delays
It was in October when GoPro stock suffered its most damaging fall after it emerged that one of the key products had suffered from production delays. That also meant that the product would miss out on the festive period. GPRO stock plunged, and GoPro had to revise its projections for the full year as a result.
Earlier, the company had projected revenue growth in the 9% to 12% range, but after the setback, GoPro revised it to the 6% to 9% range. The setback resulted in the stock losing as much as 33% of its value within a few days.
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Another important thing to keep in mind with regards to GoPro is that the company is now up against steep competition in the action camera space, and that has also been a reason behind its steady decline. For instance, big-ticket names, like Garmin (NASDAQ:GRMN) and Sony (NYSE:SNE), have entered the market in a big way.
At the time of writing, GPRO stock is up 1.50% at $4.35.
The company is completely dependent on the action camera market, and although it has diversified its products significantly, some of its more innovative steps have ended in failure. For instance, the move to get into the drones space three years ago ended in bitter disappointment. Hence, experts believe that although the action camera market is going to grow in the coming years, it is unlikely that GoPro is going to benefit much from it.
GPRO stock has jumped over 33% over the past couple of months.
Featured image: DepositPhotos © nazarenko
