The stock, down nearly 29%, has been punished after a disappointing third quarter, Hero 5 Black production issues, the recall of its Karma drone and a weak outlook. The company also faces increased competition from smart phones that offer improved video functions.
The stock is down 40% since the first week in October.
A number of analysts have downgraded the stock, and investor sentiment has touched yet another low. Yet the company isn't beyond hope.
GoPro has undeniably clever products that fit the public's rising interest in chronicling nearly everything in life. Products that fuel and feed demand are a good starting point for any company's growth.
Shares of GoPro were flat in Friday trading.
Consider these three things that GoPro must do to execute a comeback.
1. Focus on its strengths. GoPro's foray into drones may have once seemed attractive, but it was far removed from the company's core business.
The company has reversed a large part of the stock gains it enjoyed after announcing five new cameras and a Karma drone in September.
Instead of focusing on drones, Chief Executive and Founder Nicholas Woodman should move in quickly to manage production issues that led to lower-than-expected launch volumes for the Hero 5 Black camera. The company anticipates difficulties in meeting demand during the fourth and first quarters.
GoPro should focus on products that could maintain its market position, even as competition from new entrant Snap gathers momentum.
2. Look more broadly. Because its target market is so niche, GoPro has limited prospects. But it could reach a wider audience by highlighting the use of its devices not simply for action sports but in daily life.
It should stick to such a strategy, as well. That should allow GoPro to gain a more solid footing from which to stage a potential rebound.
3. Regain shareholder trust. It is evident that GoPro has lost credibility, and the recall of about 2,500 Karma drones, and the company's low-key response won't help its cause. GoPro said that the recall had affected only a small number of devices.
The Karmas lost power while in use. Moreover, GoPro had only that many devices on the market.
A better response would have been to admit errors and shortcomings and to address key challenges head-on.
Woodman should probably be more vocal and share his thoughts about these problems.
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