GoPro, Inc.

GoPro, Inc. (NASDAQ: GPRO) manufactures cameras along with mountable and wearable accessories. The company offers a range of flagship models, including its cloud-connected HERO12 Black, HERO11 Black, HERO11 Black Mini, HERO10 Black, HERO10 Black Bones, HERO9 Black, and MAX cameras. 

Recommendation Rationale – SELL at USD 1.08 

• Declining Revenue and Sales Performance: GoPro experienced a significant downturn in its financial performance in 2024, with total revenue falling by 20% year-over-year to USD 801 million. The decline was even steeper in Q4 2024, with revenue plummeting by 32% to USD 201 million compared to the previous year. Sell-through volume also weakened, with camera unit sales dropping 16% year-over-year. Revenue from the retail channel fell by 34%, and GoPro.com revenue, including subscription and services, declined by 24%, highlighting the company’s struggle to maintain consumer demand.
• Worsening Profitability and Rising Losses: The company’s net losses have widened dramatically, with a GAAP net loss of USD 432 million in 2024, a staggering increase from USD 53 million in 2023. Q4 alone saw a net loss of USD 37 million, significantly worse than the USD 2 million loss reported in the same period last year. On a non-GAAP basis, GoPro reported a USD 370 million loss for the full year, compared to just USD 20 million in 2023, demonstrating a severe deterioration in financial health. The adjusted EBITDA also turned negative at -USD 72 million, nearly tripling the losses from the previous year.
• Operating Inefficiencies and Expense Challenges: GoPro’s efforts to improve operational efficiency have yet to yield meaningful results, as operating losses have surged. GAAP operating loss widened to USD 135 million in 2024 from USD 75 million in 2023, while non-GAAP operating loss more than doubled to USD 80 million from USD 34 million. The company's gross margin improved slightly to 34.1% from 32.4%, but this was offset by increased operating expenses and unfavorable foreign exchange impacts, with an 80bps negative impact from a stronger US dollar in Q4 2024.
• Weak Market Position and Product Demand: Despite efforts to focus on high-end cameras, with 84% of Q4 camera revenue coming from models priced at USD 400 or above, the company still struggled to maintain demand. The average selling price (ASP) of GoPro cameras increased 5% to USD 346, but overall sales volume declined, indicating that higher prices did not translate into stronger revenue. The company also continues to face stiff competition from alternative action camera brands, mobile phone advancements, and a challenging retail environment.
• Tax and Financial Adjustments Further Impacting Results: A major financial setback came in Q1 2024 when GoPro had to establish a USD 295 million valuation allowance on its U.S. deferred tax assets, significantly inflating its reported net losses. This accounting adjustment, coupled with broader financial struggles, led to an extreme 705% increase in GAAP net loss per share, from USD (0.35) in 2023 to USD (2.82) in 2024. The worsening financial outlook and continuous downward revisions indicate that GoPro is facing a prolonged period of instability and financial distress.

GPRO’s Daily Price Chart

Valuation Methodology: Price/Earnings Approach (FY Dec'25E) (Illustrative)

GoPro is expected to trade at a discount amid its financial struggles in 2024, with revenue plunging 20% year-over-year to USD 801 million and a sharp 32% decline in Q4 sales. Net losses skyrocketed to USD 432 million from USD 53 million in 2023, while operating losses widened due to rising expenses. Despite a focus on high-end cameras, demand weakened, with unit sales dropping 16%. A USD 295 million tax valuation adjustment further worsened financials, highlighting GoPro’s ongoing challenges in profitability, market positioning, and operational efficiency.

Given its current trading levels, downside indicated by valuation, and risks associated, it is prudent to book profit at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the closing price of USD 1.08, as of February 06, 2025.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 06, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.