GoPro (NASDAQ: GPRO) is stuck in a range. Investors may continue to expect little upside for the medium term, due to a lack of catalysts. Even the Hero7 launch is a non-event.
On Sep. 20, GoPro launched the Hero7 camera, in three colors and at a price range of $199 - $399. Instead of hurting sales and profit margins, the company will discontinue its previous models. The entry-level camera is very much geared for the active customer. It supports video recording of 1440p at 60 fps and is waterproof at up to 10 metres. The $299 model supports 4K at 30 fps, while the top-end model has that, plus slow-mo.
To GoPro’s credit, the company is pivoting back to its core business. It nixed the drone product. Hero7 sales cannot perform worse than the Hero 6. Hypersmooth, a digital image stabilization technology, might set the product apart from other cameras.
GoPro will actively promote Hypersmooth, touting the fact users will no longer need the Karma Grip. GoPro designed the GP1, which powers the feature. Socionext manufactured it. With Ambarella (NASDAQ: AMBA) no longer the partner, GoPro owns more of the stack, giving the company more control to the design. Most importantly, GoPro’s profitability could improve even though the company will sell fewer units.
GoPro is not getting bought out soon and must start reporting earnings. Chances are slim but it is possible the company could surprise investors to the upside. The critical holiday period could be GoPro’s defining moment.
