Investors, brace yourselves for more punishment.
The stock, at around $39.50, are up 26% on the year to date. But that's small potatoes compared to where these shares were only two weeks ago when I told you GoPro was a great short. With shares trading at $47.97 back then, I said:
"While the stock may seem attractive after this [10%] decline, it's not. Because even at this seemingly more attractive valuation, the shares still command roughly 30 times this year's EBITDA, which doesn't make sense." This wasn't a popular opinion. But as it turns out, I was right.
READ MORE: 10 Stocks Carl Icahn Loves in 2014
Since then, GoPro shares have plummeted to a post-initial public offering low of $37.24, falling more than 22%. That the stock is still up 20% for the year to date only affirms how high the exuberance had gotten. There's still risk to the downside because these shares have yet to bottom following the company's $16.7 million operating loss.
While the company is growing revenue, helped by its 45% share in the action camera market, that's not enough -- not with the stock trading at 40 times 2015 estimates. That's four points higher than Facebook (FB). Apple (AAPL) is trading at only 14 times next year's estimates. Facebook and Apple are making money.