GoPro (GPRO) Stock: Don’t Get Sucked In!

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GoPro Inc (NASDAQ: GPRO)

GoPro has had a tough time in the market as of late, and for good reason. The action cameras the company makes simply aren’t selling at their prime. However, the bulls argue that sales are going to come, and soon. Today, we’ll talk about the bullish argument, the bearish argument, and why you should do everything you can to avoid being sucked into GPRO.

The Bullish Argument On GPRO

When it comes to GoPro, the bulls understand that the big issue is sales. However, they argue that we’re going to see some big changes in sales. In fact, they believe sales are going to climb moving forward. There are three primary reasons for this:

  • Advertising – One big thing that we hadn’t seen much of from GPRO is advertising. The reality is that the company did very little to advertise its products for years. However, more recently, since sales are low, we’re starting to see investments in the area. One of the biggest advertising deals we saw came a few months back when the company partnered with Red Bull. Some investors believe that, as the company focuses more on advertising, we’ll start to see stronger sales volume.
  • Drones – Drones are the next big things in the wave of videography and photography. The bulls argue that they are also opening up an entirely new audience for GPRO. You see, the company’s action cameras are designed to film in motion, and are one of the few options that is a good fit for the vibrations and other movements associated with flying drones. As the drone industry picks up, the bulls see more demand for these action cameras in the future.
  • Virtual Reality – More recently, GoPro had an expo, so to speak, revolving around new plans. Those plans include virtual reality. With VR expected to become a massive industry, this could also help to boost the company’s sales.

The Bearish Argument

While it’s clear that the bulls do have some valid points, the bears also have a very valid point. In fact, the entire bearish argument is based on one fact. That fact is that GPRO hasn’t been able to grow sales of its action cameras in the past. For the bears, the big factor here isn’t advertising, it’s the product.

Think about it – over the years, you’ve heard of GPRO. In fact, how many people do you know that don’t know about the product? At the end of the day, the product awareness surrounding this action camera is incredibly strong. Advertising isn’t the problem; the problem is that the product is designed to fit a very small audience.

GoPro cameras are one of those products that just about everyone thinks is cool. When we walk by them in the store, we say “Oh… that’s neat!” Then, we tend to go on with our day. At the end of the day, there’s simply not enough of an audience for this thing to become profitable. Even when it comes to a growing drone industry!

Why This Is A Stock Worth Avoiding

First and foremost, I want to say that GPRO branded cameras are great products. In fact, I own one myself. I also own a couple of drones. However, I’m only one small piece of the population. At this point, I believe that the consumers have spoken. Unfortunately, GoPro action cameras simply aren’t something that the masses will buy. As a result, I think we’re watching a company that started with the bank and will eventually fall into ashes.

What Do You Think?

Where do you think GPRO is headed moving forward and why? Join the discussion at TalkTRENDZ from CNA Finance!

[Image Courtesy of Flickr]

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