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Is GoPro The Apple Of Its Sector?

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Is GoPro The Apple Of Its Sector?

GoPro Inc (NASDAQ: GPRO) is one of the hottest stocks right now, but critics argue that its success could be diminished by smartphone manufacturers that build stronger phones.

This already happened to Flip Video, which was shut down a few years after its rise to fame. Will GoPro face a similar fate, or will the company become the Apple Inc. (NASDAQ: AAPL) of its sector?

"A lot of these arguments [against GoPro] existed for Garmin way back in early to mid 2000s," Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. "There was always this threat that Garmin's a one-trick pony, that it's going to be easy for Sony -- it wasn't Apple back then, but Sony, Samsung, various device/camera makers -- were going to unseat Garmin."

That didn't happen, however. Garmin thrived until an entirely new technology (smartphones) entered the fray.

"I think GoPro, in a lot of ways, could end up being the Garmin of its day," said Udall. "It's not going to be the Apple of its day, but maybe the Garmin of its day. And you know what? Garmin had a really good run from 2000 to 2007. Apple eventually started hurting Garmin in a lot of ways, but it took a long time. It basically took a decade."

Related Link: Will Apple Make A Splash In 3D Printing?

GoPro's Untapped Markets

Udall said that one thing investors are overlooking is the potential for GoPro to lead the security space. He thinks the company could get into the home and commercial security markets, as well as law enforcement.

"If I want to be a bull on GoPro long-term, I think that's a very easy market for them to have a ton of success in," said Udall. He added that he doesn't expect many other companies to have success in this realm.

"They have developed a device that can take an immense amount of punishment," Udall continued. "I think the security angle is going to be a big deal long-term. I think it could be one of GoPro's biggest markets going forward."

Competition Never Stops

Regarding the fears that GoPro will be unseated, Udall said that "any technology company can be killed over time."

"That doesn't happen for competition, per se," he explained. "There was a time when I was bearish on Apple, and it was when Apple wasn't making large-screen devices. It wasn't really the competition. They should have made large-screen phones much earlier than they did."

Udall also said that GoPro has already had to ward off competitors as it rose up and eventually became a publicly traded company. He said the firm could make a mistake that would allow a future competitor to compete more effectively, but it hasn't happened yet.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Latest Ratings for GPRO

DateFirmActionFromTo
Feb 2021Morgan StanleyMaintainsUnderweight
Dec 2020Morgan StanleyMaintainsUnderweight
Nov 2020Morgan StanleyMaintainsUnderweight

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