GoPro stock price has crawled back in the past few days as investors buy the dip. After hitting an all-time low of $0.6368 earlier this month, it has risen in the last six consecutive days, and is hovering at its highest point since February 25. It has also jumped by over 30% from its lowest point this year. So, is it safe to buy GPRO for long-term gains?
Why GoPro stock price has crashed from ATH
While GoPro share price has risen in the past few days, it remains down by almost 100% from its all-time high. Its market cap has plunged from over $3 billion at its peak to about $155 million today.
GoPro’s stock has plunged as the company has continued to suffer over the years. Its annual sales have dropped from $1.16 billion in 2021 to $801 million last year, and analysts anticipate that the slowdown will continue.
GoPro’s main issue is that it remains to be a one-product company. While its action cameras are highly popular, its attempt to expand its business to other areas failed. The most notable one was the Karma, a drone that it wanted to complement its action cameras.
Karma failed because of the soaring competition in the drone industry. Most of this competition came from DJI, a Chinese company that dominates the industry today. GoPro also cited having margin pressures when it discontinued the service.
The company now offers the Hero action camera, which it regularly updates. These upgrades are mostly on features like video stabilization, durability, resolution, and power.
While these updates are notable, most people don’t see the need to buy a new action camera unless when it is necessary. This explains why the company is now shipping fewer cameras than it did in the past.
At the same time, GoPro’s business model means that it is highly difficult to grow its subscriptions.
Read more: GoPro stock price collapsed in 2024: Will it recover in 2025?
GPRO growth is decelerating
The most recent data shows that the company’s performance continued to decelerate. It shipped 581,000 camera units during the quarter, down from 923,000 in the same period a year earlier. This slowdown will likely continue because of the reasons described above.
GoPro’s revenue dropped to $200 million in the fourth quarter from $295 million a year earlier. Its quarterly loss was $14.4 million a big reversal after the company made a $4.2 million profit in Q4’23. This loss was notable because the company reduced its staff from 930 in Q4’23 to 696.
GoPro’s subscription business has stalled, with the subscription and service revenue coming in at $27.2 million, down from $27.5 million in the same period a year earlier.
Wall Street analysts anticipate that GoPro’s business will continue slowing in the coming years. The average estimate is that its first-quarter sales will be $124 million, down by 20% from a year earlier. For the year, the expectation is that the revenue will drop by about 8% to $738 million.
GoPro stock price analysis
GPRO stock chart by TradingView
The weekly chart shows that the GPRO share price has crashed in the past few years. It dropped from a high of $13.50 in 2021 to below $1. The stock has remained below all moving averages, a sign that bears are in control.
Therefore, the stock will likely continue falling in the coming months as its growth momentum eases. If this happens, the next point to watch will be at $0.50. On the positive side, however, there are signs that it may go through a short squeeze since it has formed a falling wedge pattern. If this happens, the GoPro stock price will soar to the 50-day moving average at $1.45.
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