People absolutely love to take pictures and that is evidenced by the stats that show the #1 use for smartphones is taking pictures. Yes, people text, talk, web brows, and do other things on their phone but the camera is by far the most popular feature. Just look at any group of kids under 20 and all you will see is them using their phone camera over and over.
That is undoubtedly why GPRO’s IPO was so successful and the stock at one point doubled from its opening price. GoPros are everywhere the cool and active kids and young adults are: on the ski slopes, on helmets at the skate park, and now they are on drones.
Drones were the most popular new tech toy this Christmas and 2015 will be a big year for the industry. Drones (big and small) are just plain killer cool and that camera attached to them is what puts them over the top. GoPro knows this and now, instead of just hoping people use a GoPro with their new flying machine, they are have decided to build and sell their own drones. Its the right move for a company that needs to constantly stay on the cutting edge of cool.
GoPro’s stock has been on a steady decline since October 2014 after more than doubling out of the gate. Growth investors jumped on this one right at the IPO but then apparently started abandoning ship 3 months later as you can see in the chart below.
Any market sell off that might happen in 2015 will probably hurt the high growth stocks like GPRO more than value stocks. Investing in GPRO is risky now as the market routinely digests big moves up and down showing that investors are unsure and nervous about the economy.
Another thing to consider is that GoPro is the “hip” camera company right now with the younger generation but that could change. The camera industry is not exactly one with a lot of barriers to entry and that is what worries me about the stock.
Entry into the drone industry is undoubtedly a shrewd move, as long as they can make drones that are as good as their cameras. That has yet to be seen and will play a big part in the eventual direction of the stock.