GoPro (GPRO) Stock: Gearing Up For Losses

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GoPro Inc (NASDAQ: GPRO)

GoPro has been an incredibly interesting stock to watch as of late. In the past, the company struggled as it became clear that the target audience for its products was relatively small. However, more recently, as the company has expanded its product offerings, investors have become excited. Nonetheless, the company will be releasing its earnings report for the most recent quarter in just a couple of days; in my opinion, this won’t be anything to be excited about. In fact, I’m expecting to see declines following earnings. Today, we’ll talk about what is expected and why GPRO is likely to take a dive after the report.

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GPRO To Report Earnings On The 27th

As mentioned above, GoPro is expected to report its quarterly results relatively soon. Unfortunately, however, there aren’t many people that seem to be expecting positive news. This is for good reason. With recent struggles in mind, analysts seem to have an incredibly bearish opinion of what to expect.

According to NASDAQ, analysts are expecting that GPRO will generate a loss of $0.73 per share. This is a massive decline from the same quarter one year ago, when the company produced earnings in the amount of $0.25 per share. However, things can get worse than that, as well. In fact, some analysts are expecting revenue and earnings to come in below these expectations.

What I’m Expecting To see From The Earnings Report

While I would love to tell you that I’m expecting to see tremendous results from GPRO on this earnings report, that would be a lie. The truth is that I’m not expecting the company to even meet analyst expectations. At the end of the day, the company faces the same problem that it has faced since its inception. The extreme action cameras offered are top of the line, and, of course, they are pretty neat. However, the audience for these types of products is relatively small. On top of the fact that the audience is already relatively small, consumers tend to spend less money during concerning economic times. Let’s face it, the last quarter was gut-wrenching when it came to the global economy. That’s not going to help sales at GoPro. All in all, it looks like the company is set to disappoint.

Is There A Light At The End Of The Tunnel?

I hate to be a pessimist. However, I don’t see much positivity when I look at GPRO, no matter how you slice it. The company didn’t do well when its extreme action camera, the Hero, was the only product. Granted, they are starting to add new products, the most interesting of which, in my opinion, are the drone cameras. Nonetheless, I don’t think that this will be enough to save the company.

Now, don’t get me wrong, I have a GoPro camera. However, that’s because I mount it on my kayak or go diving with it. I happen to fall in the very small audience range for the product. There aren’t many of us! On top of that, I will say that I have a drone. The DJI Phantom 3 to be exact. I love it, I fly it all the time, and when I heard about the drone video offering from GPRO, I was interested. However, after comparing my options, I have to say, the company’s product is at the bottom of the totem pole in this industry; there are already clear leaders, and they aren’t one of them! At the end of he day, I believe that GPRO will continue to tumble until investors simply lose faith in the company all together. Until they come out with a product that fits the masses, not just a select few, I’m expecting to see further declines.

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What Do You Think?

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

[Image Courtesy of Flickr]

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Hey, Im Joshua, the founder of CNA Finance. I enjoy following the trends in the market and finding the catalysts that are making the moves. If you want to get in contact with me, leave a comment below or email me at CNAFinanceHelp@gmail.com Please keep in mind that I am not an investment advisor and nor is CNA Finance. This is a news and information gathering outlet. We may work directly with some of the companies that we write about. If we have a business relationship with an issuer, we will mention that in the articles. We also have various affiliate relationships with advertisers and may be paid if you sign up for a service that you were referred to through our website.

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