GoPro $GPRO stock is down 87% from all-time high, reached in 2014 as the revenues of the company are declining. They rely on a single product, action cameras, with a very low competitive advantage compared to a smartphone $AAPL .
However, in recent years, GoPro has been changing its business model, moving towards DTC (Direct to Consumer) sales on its website. This cuts the middleman and at the same time, allows users to subscribe to their services (such as picture editing software) for $50/year. The company aims to increase its margins.
So far, it seems to be working as the number of subscribers is growing rapidly. We need to be careful about these numbers since many of the new subscribers are on a one-year free subscription after purchasing a new camera. What we will need to know in the long-term, is how many of these subscribers are going to renew their subscription.
GoPro has been able to maintain a good balance sheet and they are probably going to return cash to shareholders next year.
At the current price, however, I'll say that GoPro is expensive since it relies too much on the success of the business shift.
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