GoPro shares took a tumble with their latest announcement on Q4 2016 Holiday Sales that were way below expectations. They also announced a restructuring with a 7% cut in their workforce with a one off cost of between $5M-$10M. Not good as competition continues to grow from established companies such as Sony, Nikon and TomTom.
So how bad is it? Well Q4 revenue estimates at $435M where analysts had predicted $512M and full year at $1.6B as apposed to $1.69B. That is quite a miss in itself but other problems face GoPro.
The ticket price of the Hero 4 action camera was slashed from $399 to just $199 to clear stocks over the holiday period. This surprised me as I experienced a lot of interest in the cameras over this period. Perhaps turning interest into hard sales is the failing.
Looking to the future the Hero 5 has been delayed as the product looks to expand its horizons. Talk of making it more useful with drones and virtual reality may help this. Although my own thoughts are that the use of drones themselves will be heavily curtailed by regulation and legislation over the next few years. Worries about misuse are starting to stack up.
So what do the markets think of GoPro today? Stock fell to a low of just $11 today before pulling up to over $12. That is a long drop from the high of $87 in Oct 2014. Lets hope that new products and diversification can help GoPro to grow.