GoPro Inc (GPRO) Hopes HERO+ Release Will Rescue Distressed Share Price

GoPro (NASDAQ:GPRO) Hero 4

GoPro Inc (NASDAQ:GPRO) recently launched its latest versions of HERO+ action cameras yet the market value for the company is in a steep decline. HERO+, apparently a hybrid of the high-end HERO4 and the cheaper HERO, comes with a list of new improvements in its features.

GoPro (NASDAQ:GPRO) Hero 4

What’s New About HERO+?

The new variation of the HERO+ action camera is waterproof and mountable, and it functions well with GoPro’s applications. In addition, it also offers in-built Wi-Fi and Bluetooth features. However, the lack of LCD features serves a big drawback to this new HERO edition from GoPro.

GoPro has priced the HERO+ line of action cameras at $199.99. In comparison, HERO4 Black and Silver is priced at $499.99 and $399.99 respectively. HERO4’s market price has been reduced by $100 to $299.99. The entry level HERO cameras have been priced at $129.99.

In spite of the new product launch, GoPro’s share price has continued to drop.  Over the last year, GoPro shares have tanked, going as low as $30 as of September, 2015.  Just one year ago, GoPro shares were trading at around $95. Due to sluggish demand in the action camera market, along with the rising competition from the Apple and Xiaomi, GoPro seems to be in a tough struggle these days.

Action Camera Market Is About To Soar

However, speaking of the overall industry, the action camera market is projected to reach $30.6 million units by 2020 from 5.2 million units in 2014. To put that in context, GoPro’s market share is 47.5% followed by 12% of ION, 6.5-8% of Sony and 1% of Polaroid. While the action camera market is rising exponentially, the digital camera market fell by over 70 percent to 42 million units in 2014 from 122 million units in 2010. This has been due to the heavy competition from the smart phone industry.

A Bit on GoPro’s Financials

GoPro’s revenue has touched $2.3 billion as of FY2016 with a surge of 24%, with a breakup of around $890 million coming from the domestic market. Camera sales are expected to soar 18% to 8.7 million units. With cash in hand of $236 million last financial year, the gross profit of GoPro rose to $627 million in FY2014-15. Net income has gone up to $128 million in FY2014-15 from around $30 million in FY2012-13. In other words, GoPro’s performance seems exciting.

Although a report on Barron’s says that GoPro is a one-trick pony like Blackberry, Flip and Palm, Stern Agee CRT analyst Rob Cihra seems optimistic about GoPro’s future. With the strong brand recognition and solid market position of GoPro, he believes that GoPro’s share will bounce back in no time, as the market becomes active. Only time will tell.

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