It’s been 15 years since GoPro first entered the action camera industry at the reins of CEO, Nick Woodman and it’s becoming more apparent that the company needs to shift it’s focus away from sales growth and more towards sustained long-term profits. As GoPro enters the mature stage of it’s product lifecycle, market trends are suggesting that it’s continued success will be dependant on it’s loyal customer base and from it’s newly launched video editing apps. It’s no surprise that the action camera industry is experiencing a decline in sales growth due to mobile cameras being so much easier to use. While GoPro products will likely always dominate sales in the sports industry due to it’s wide angle lens and un-contestable durability, it’s becoming clear that for every day users, it’s just easier to use an iPhone.
After a failed launch for the Karma drone in 2016, it appears that innovation for the short term is heading towards a standstill. The key for their continued success during this time (in my opinion) is for them to capitalize on the opportunities that stem from their powerful brand awareness, and already high consumer engagement. GoPro boasts a strong 25+ million followers on social media which includes a focused presence on Instagram which they average 3,000 new followers daily. The opportunity for engagement from partnered advertising isenormous through these channels, which could be a huge boost to their revenue. GoPro entered late 2017 completely debt free which means they can incur debt and grow their business through innovation quite easily. In the mean time, I think it’s in their best interest to not over saturate their market with new less-developed products and rather wait for truly revolutionary products to be formed. In the mean time, their current sales model and strong customer loyalty will prop them up in order to sustain short-term success.
GoPro is currently selling at a stock price, which in my opinion, undervalues it’s intrinsic future earning power. As it currently sits, GoPro is selling at $11.10 per share after a high of $86.97 in 2014 and a low of $7.70 in 2017. Aside from the financials, in which I enjoy so dearly, GoPro is continuing to prove to be an exciting company to watch and likely will continue to be for the years to come.
Brandon Sardelis is a Commerce graduate from Dalhousie University. He is currently travelling abroad for the purpose of leisure and self-discovery. In his spare time he enjoys playing music, volunteering at festivals, playing sports and reading about finance.