GoPro Share Price Forecast September 2021 – Time to Buy GPRO Stock?

Shares of American technology company GoPro (NASDAQ: GPRO) are in the red today after closing at $9.57 on September 17^th, (19:36 UTC-4). The shares have decreased by over 85% since debuting in 2014 despite being the leading company in the action camera industry.  Investors have always perceived GoPro as too one-dimensional. However, that is about to change following a range of announcements released by the company since 2020.

GoPro – Technical Analysis

According to the financial statement released by GoPro, the company’s market cap is at $1.473 billion with total assets worth $757.944 million.  Revenue for 2020 was at $891.92 million with a profit margin of -7.49% compared to $1.19 billion in 2019.

Moving averages for GoPro such as Exponential Moving Average (10)(9.63), Simple Moving Average (10)(9.59), Moving Average (20)(9.77), Simple Moving Average (20)(9.80) and Exponential Moving Average (30)(9.91) are indicating a sell action. On the other hand, oscillators such as Relative Strength Index (14)(43.06), Stochastic %K (14, 3, 3)(38.78), Commodity Channel Index (20)(−69.87),  Average Directional Index (14)(16.66) and Awesome Oscillator(−0.53) are neutral.

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Recent Developments

GoPro has previously made failed attempts to move into media as well as having an unsuccessful run in the drone market. GoPro has introduced several new initiatives since 2020 to shake things up. It has introduced a direct to consumer business on its website rather than selling off its cameras at a wholesale rate through retail channels.  The website accounted for more than 50% of sales in the trailing 12 months. Gross margin for GoPro increased by 950 basis points year over year in the second quarter, reaching 39.8%. Additionally, the company’s new subscription business delivers a gross margin between 70% and 80%.

GoPro has introduced a subscription service for loyal customers where they can unlock a range of new features and benefits including replacements, unlimited cloud storage and product discounts. The subscription costs $49.99 per year and is expected to generate a recurring revenue of $90 million in 2022.The company’s net income has also risen steadily despite its revenue trending lower over the past 4 years.

GoPro is aiming to incentivise its customer base to buy direct whilst also adding subscription services that can be sold at a high margin. GoPro power users have been enticed with cloud storage, editing tools, and even improved accessories have made subscription products. However, this business transformation can also have its limitations. There are limits on how much revenue the company will be able to achieve if it can’t increase sales volume.

Should You Buy GPRO Shares?

GoPro shares are not long-term growth shares and it won’t add much value for investors even if it is profitable now. The company has made some positive improvements such as the move to more recurring subscription revenue and a general shift toward higher-margin power users. While the company doesn’t focus on volume growth anymore, there are limits to how it can serve a niche market.

The appeal of GoPro has always been the ability to strap cameras in unconventional places and angles to capture amazing points of view. The company has to find a path beyond its HERO line of action cameras, such as the wearable market. However, the company has failed to make in-roads into adjacent markets in the past. Thus investors do not have the confidence to succeed in any market outside its own. Investors can look past these shares for now but can add it to their watch list.

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