The performance continues to fall short of expectations, which is the most important reason for GoPro to continue to sell. The latest financial report shows that in the fourth quarter of last year, the company's revenue fell 24% year-on-year to 540 million US dollars, significantly less than expected, the net loss was 115.7 million US dollars, a significant increase from the net loss of 34.45 million US dollars in the same period of the previous year. Total revenue for 2016 fell 26.8% to $1.62 billion.
Shares of US portable sports camera manufacturer GoPro hit a record low on the 7th, and have fallen more than 90% since hitting a high in October 2014. As the sports camera market became saturated and industry competition intensified, GoPro's performance continued to be under pressure, with revenue falling 26.8% last year. Recently, a number of institutions such as Goldman Sachs and Citigroup have successively released reports to bearish on the prospects of GoPro's share price.
Performance continues to fall short of expectationsGoPro was launched in June 2014 at an issue price of $24 per share, the highest ever reaching $98 per share in early October 2014, with a market capitalization of more than $13 billion. As of the close of March 7, the company's stock closed at $7.93, plunging more than 90% in the two and a half years since the highest point, and the current market value is only $1.13 billion.
The performance continues to fall short of expectations, which is the most important reason for GoPro to continue to sell. The latest financial report shows that in the fourth quarter of last year, the company's revenue fell 24% year-on-year to 540 million US dollars, significantly less than expected, the net loss was 115.7 million US dollars, a significant increase from the net loss of 34.45 million US dollars in the same period of the previous year. Total revenue for 2016 fell 26.8% to $1.62 billion.
Wall Street institutions have recently released reports, and the outlook for bearish GoPro shares has also put pressure on the company's share price. In this week's latest report, Goldman Sachs downgraded GoPro's target price from $9.5 to $6, and the rating was downgraded from "neutral" to "sell". Analysts at the bank said that the downgrade of the GoPro rating included that the company's core sports camera market was saturated, and it did not attract a wider and more mainstream audience, and that the company encountered product launch issues during the holiday shopping season. The performance in the drone market is also disappointing.
Goldman Sachs analysts expect GoPro to continue to face fundamental difficulties. In order to promote the more positive performance of the stock price, the company needs to pay more attention to the development of new products, especially the launch of the next generation product Hero6, which should be “sufficient to reinvigorate the growth of core business. And widen the gap with competitors."
Citi also gave GoPro a "sell" rating with a target price of $8 and is expected to face a loss in 2017. The bank's analysts compared GoPro to "the best house in a degraded community," noting that GoPro's market-leading sports camera products are not sufficient to overcome the overall decline in the market for standalone imaging products such as cameras and cameras, as well as the United States. Mature markets are becoming increasingly saturated.
Citi expects that the growth of the digital camera and camera market will remain “relatively flat†by 2019, and GoPro’s market share will remain in the range of 9.5% to 10% in the next few years, while new drone products will “face from Fierce competition from a wider range of mature rivals."
Increased competition in the wearable marketIn recent years, the use of portable motion cameras has become more and more popular. Research firm BeigeMarkeTIntelligence expects that the global sports camera market will reach $10 billion by 2021, with a compound annual growth rate of 23%.
As the pioneer of the portable sports camera market, GoPro has dominated the market with a market share of 94%. However, with the increasing appeal of the “big cake†of sports cameras, more and more competitors have emerged. In addition to traditional camera companies such as Polaroid, Sony, HTC and Xiaomi have also entered the portable camera market. Compared with competitors' products with similar functions but lower prices, the hardware configuration of GoPro's own products has not been significantly improved, and the first-mover advantage is becoming less and less obvious.
GoPro's efforts to create a platform with image and video sharing as its core have so far had little effect. Last year, the company spent $105 million to acquire two mobile video editing companies, hoping that the integrated products will provide users with a seamless experience from shooting, editing to sharing. But GoPro software requires a fee, which is a controversial step in its strategy.
GoPro has also tried to save the decline in performance by opening up new product lines, but it was unfavorable. In October last year, its drone Karma was announced to be recalled only two weeks after its listing, partly because Karma was in the process of flying. The power was lost and the crash occurred.
Under continuous operating pressure, GoPro has not only taken steps to reduce operating costs in the past year. In early 2016, GoPro announced a 7% layoff, announced in November last year that it would continue to lay off 15% of its workforce and close the entertainment business. Earlier this month, the company said its operating expenses this year will be cut to less than $600 million.
Not just GoPro, but other market segments in the wearable market are also feeling the impact of increased competition. Shares of wearable device maker Fitbit, which produces smart bracelets, fell nearly 20% this year, hitting an all-time drop of 85% since hitting an all-time high in August 2015. According to the latest report from IDC, the data research organization, Fitbit shipments in the fourth quarter of last year fell by 22.7% year-on-year. The market share dropped sharply from 29% in the same period of the previous year to 19.2%. Xiaomi and Apple all overtake.
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