The GoPro stock price continued declining in 2024, fueled by concerns about its viability. During the year, it crashed by 68%, valuing the company at just $171 million, much lower than its all-time high of $2.6 billion. So, what’s next for the GPRO shares?
GoPro’s business is struggling
GoPro, a well-known manufacturer of action cameras, has been fading in the past few years, and concerns about its long-term viability remain.
Its annual revenue dropped from $1.16 billion in 2021 to $1.093 billion in 2022 and $1 billion last year. Analysts expect it to fall to $799 million this year and $752 million in the next financial year.
This weak performance is mainly due to the fact that the number of people buying its action cameras is not growing as it did in the past. Also, the industry is highly competitive, with firms like DJI and Sony selling equally good products.
GoPro’s challenges are compounded by its being largely a one-product company. Its attempts to enter the drone market failed. In addition to the flagship Hero13 Black, the company also sells Hero12 Black, Hero11 Black Mini, and Max.
GoPro’s subscriptions are also not growing, which is another reason its business is not doing well. Its subscriber count rose by just 2% in Q3, helping its subscription and service revenue rise by 11%
The most recent results showed that GoPro’s revenue continued to fall in the third quarter. Revenue dropped to $259 million from $294 million in the same quarter a year earlier. Its adjusted EBITDA moved from $7 million to $5 million.
GoPro has continued to lose money in the past few quarters. Its quarterly net loss was $8.2 million, higher than the $3.7 million it lost in Q3 ’23.
Read more: What happened to the plunging GoPro stock price?
Cost cutting measures won’t be enough
GoPro has blamed its lackluster performance to the macro factors that have affected consumer spending. While this is true, its main issue is that the action market camera is not growing fast enough. Also, customers spend more time with its cameras, reducing the need for regular upgrades.
GoPro has also blamed its competitors, who it accuses of stealing its intellectual property. The management has vowed to fight these IP claims at the highest courts.
Meanwhile, the management is working to offset the slowdown in its business with cost cuts. It hopes to have operating expenses of $250 million in 2025, $110 million lower than this year. The management hopes to ensure that GoPro is a leaner and more profitable company.
These measures will help it continue expanding its margins. Its gross margin expanded to 35.6% in Q3 ’24 from 32.2% in Q3 ’23.
GoPro stock price analysis
The daily chart shows that the GPRO share price has been in a strong downward trend as its growth has deteriorated. It has moved to a record low and became a penny stock.
GoPro has moved slightly below the key support at $1.15, its lowest swing on November 20 and August 7. It has also remained below the 50-day moving average, while the Relative Strength Index (RSI) has formed a descending channel.
Therefore, GoPro’s path of least resistance is downward and could move below $1 in the next few weeks. Still, there is a risk that it could go through a short squeeze as investors buy the dip. Such a price action would mirror the performance of other companies like Carvana and Peloton that nearly collapsed and then bounced back.
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