Why GoPro Needs A Hero 5 Inflection Point

Why GoPro Needs A Hero 5 Inflection Point
Image Source: GoPro Press Kit

If you have never used an Action Camera then the company called GoPro may mean little more to you than a name from the camera commercials on TV. However, if you’re into skiing, Snowboarding, climbing, horse riding, jet skiing and many many more activities for which you can strap a camera to a part of your body. Then that name will probably mean quite a lot to you because up until recently, it dominated the market for which it is considered to be the pioneer of.

A Bad Year at GoPro

Just like all companies GoPro is subject to the ebbs and flows of market forces, as well as the decisions its people make. Which when combined can make or break a company, which was once riding high in no matter of time (look at BlackBerry for Example).

And whilst I am not directly comparing GoPro to BlackBerry it is in a similar position as to where things started to go wrong for the once Canadian tech giant. For example, if we go back to 2015 it was not a great year for the company. Having made its name famous for creating wearable action cameras for mountain bikers and surfers plus anyone else who loves living on the edge. It managed to ship more product than it had ever done before.

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Why GoPro Needs A Hero 5 Inflection Point
Source: Pixabay

However, and this is where the trouble started, even though sales were up, its bottom line dropped by more than 31 percent between the fourth quarters of 2014 and 2015. And to make matters worse, by the end of last year its stock value had plunged to less than 50 percent of what its original posting price had been.

So what can be done, profitability is down and your market is being squeezed by competitors like Sony, Garmin, TomTom and a number of others that have encroached onto your territory. It looks as though GoPro needed to diversify to avoid the BlackBerry effect!

New Products

Like most other companies in trouble, GoPro reached out and tried to target other markets that it thought were related to its own. This initiated some work on products like video editing packages and a Drone called Karma, which until recently had a launch date for sometime in July. However with the news that GoPro was working on its first Flagship Action Camera since 2014 the Hero 5 this has been put back a little.

As for why the Karma drone has been put back, no one really knows, but some rumors are suggesting that his could be to bundle it alongside the Hero 5 camera in October.

Exciting News

Having not released a new state of the art action camera since the Hero 4 Black in 2014, the news of a Hero 5 with some seriously outstanding capabilities has got people talking positively about GoPro again. However, there are some concerns that the press and rumors may have initially over hyped its abilities.

One such hyped ability is the inclusion of live streaming as if this was to be the case the Hero 5 would surely be the first action camera to have such capabilities. As for a list of specifications, there’s nothing official to give you. At this moment in time, all we have are rumors, but this is how they look.

GoPro Hero 5 Specs

What you need to remember now, is that these specs and features have not been officially confirmed, so don’t get too excited.

Seen as a major upgrade when compared to the Hero 4 Black camera, the Hero 5 is expected to feature support for 8K Full Ultra HD resolution, oh and there’s also talk about it being able to shoot 4K video at an amazing 60FPS and 1080p!

It also seems as though the ability to attach a dual-camera to anything is catching on as it’s not only the iPhone 7 that could be getting one. If this is correct and the Hero 5 does get a dual-camera setup this could mean that it will be able to shoot 3D video, which is exciting. Moving on there’s also chatter about it being waterproof up to a depth of 60-meters, but there’s no mention of how long it could sustain that depth for.

As for how this news and the possible release of other products will eventually affect the bottom line of GoPro who Knows. However, there has been an encouraging thumbs up from one sector of the business community!

JPMorgan Recommends Buying GoPro

It seems as though the news of possible new products may have born some fruit for GoPro. As JPMorgan analyst Paul Coster recently told his clients to buy GoPro, even though they had a beaten down price of $17 on the NASDAQ.

In a statement he said:

We expect GoPro to post 2Q results that either meet, or surpass low financial expectations, to reiterate full-year revenue guidance, and to provide constructive commentary regarding the introduction of the Hero5. Shipments of which should start in late September.

Coster went on further to say:

We, therefore expect an earnings inflection in 4Q16, so an earlier return to net profit in 3Q would be a positive surprise.

Final Thoughts

Whilst the JPMorgan endorsement does seem like good news, it is clear that they see this as a trade on the long side. Which is still not a bad thing, however, what the company needs is sustainable growth. And this will all depend on whether the new products GoPro launches can reactivate year on year growth.

It is expected that GoPro will launch its new products in October, as for a date I have been unable to discover one. So, if you’re a GoPro fan and looking to get your hands on a Hero 5, keep checking back because as soon as its official someone here on Valuewalk will write about it.

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