Taking Another Look at GoPro Stock

In 2014, GoPro IPOd at 24 bucks a share raising 427 million dollars in the process. It was one of the most high profile IPOs in recent history, and the stock would go on to reach on all time high of $93.85 a share. Now, however, the stock trades at $7.12 a share at time of writing. That is a very high fall in grace, and there were a lot of reasons why this massive decline in stock price occurred, but what I wish to accomplish in this article, is the answer to the question, is GoPro a stock a buy at its current valuation.

First, there are a lot of things that I do really like about GoPro. They have a p/e ratio of 3.01 at time of writing, and they are trading at a market cap of just over one billion dollars. I really like this valuation for GoPro as a potential investor especially when I look at their growth capabilities. Many people might be reading this and thinking that GoPro makes their money from selling action cameras. Those people would be right but also very wrong. While that does make up a lot of their revenue, they also launched a subscription based business model that they can receive reoccurring revenue from. I think that this could be really big for GoPro's growth. 

Obviously, there are also a lot of things that make me hesitant to buy GoPro's stock as well. While there definitely is a market for action cameras out there, it's not a big one. A lot of people simply don't really do much. While the ability to record oneself surfing, kayaking, biking, and living an adventurous life is a benefit for some, most people don't have an adventurous life so an action camera doesn't benefit them. I think that that's been the biggest problem facing GoPro. People see the benefit in what they provide, but a lot of people are just not living an adventurous lifestyle. It's kind of unfortunate but it is the way it is. Also, GoPro does have a good amount of competition out there, and even though they're the premium brand, they're the premium brand in a small market. 

I think GoPro stock could be an awesome opportunity for investors, but there is a lot of obstacles in place for the company. The subscription based business model, in my opinion, does represent a great opportunity that could help the company out a lot, but there is still a lot to be seen concerning it. I won't tell anyone if they should or should not invest in GoPro, but my hope is that this article helps one make the decision a little easier.

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