Will Virtual Reality Lead to GoPro's Turnaround?

GoPro’s (GPRO) stock moved higher after the company released an earnings report that pleased investors. While GoPro long may see this as the start of a turnaround, I think the company is still a bad investment. Although GoPro has fallen too much to short, I reckon investors should still stay clear of the stock.

More hype

Nowadays, the Virtual Reality market is getting much more attention from massive tech companies. Major companies are putting efforts to enter into the Virtual Reality market. Recently, GoPro publicized GoPro VR, a website and an application, based on virtual reality for Android and iOS users to experience as well as share the virtual reality videos.  This new website promotes GoPro’s latest six-camera Omni-rig and also contain several categories of videos.

GoPro’s launch of GoPro VR indicates that it desires to move onward in the VR market without the support of Google.
GoPro now has all the fragments required to build a Virtual Reality ecosystem such as stitching software from Kolor, a comparatively low-priced VR rig along with its own VR application and site. However, the toughest part will be compelling a considerable amount of users to view its first-party virtual reality content.

GoPro, in its most recent quarter, appeared to compare media progress and brand power with the number of followers it had on Instagram, YouTube as well as other social media networks. On the other hand, a major portion of the company’s social achievement can also be credited to the reputation of those websites.

YouTube comes in as one of the top three most visited websites, whereas GoPro does not even come under 2,500. If GoPro somehow managed to convince its YouTube users to shift towards GoPro VR, it is not likely that its consumers will be in favour of purchasing a $5,000 six-camera rig.

Apart from this, the introduction of a smartphone compatible GoPro VR app also signifies GoPro’s struggles to add strength to its software. During the prior few years, GoPro was broadly deprecated for sticking with manual offloading and editing solutions, which looked out-dated equated to an automatic cloud-based backup service for smartphones such as Google Drive.

GoPro has shifted its focus on Virtual Reality market mainly due to the slothful demand for its action cameras. However, many other major firms like NVIDIA have already grasped a strong position in the VR market, making it almost impossible for GoPro to dominate the space.


Retail investors who have believed in GoPro’s hype have ended up losing a lot of money and I don’t expect things to change in the future. Investors who have learned from their mistakes will avoid GoPro despite its efforts in the VR industry. Despite the earnings report, I think the stock is still a sell.
Published on May 9, 2016
By Akshansh Gandhi

Copyrighted 2016. Content published with author's permission.

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