How to Buy GoPro (GPRO) Stock

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GoPro has been one of the biggest technology success stories of the recent past, although GoPro stock has given investors a roller coaster ride since its initial public offering (IPO) and has settled at low levels. Still, good opportunities for traders and investors can often be found in tech stocks and companies with an advanced product like GoPro. 

GoPro (NASDAQ:GPRO)

5.600

-0.21 [-3.61%]
5.5 – 5.7888
5.565 – 12.1374
5.78
157.27M
2.22M/2.33M
880.74M
157.27M
/0%
0.000
129.70M

Quick Look: How to Buy GoPro Stock

  • Pick a broker. Find a place to buy and sell stocks that has the specific resources you need to trade. If you’re a beginner, look for a broker with educational resources. If you’re experienced, look for a trading platform that allows for customization.
  • Assess the trading platform. Get familiar with the broker you’ve chosen. Learn how to access the features within your account and make trades.
  • Fund your account. In order to make your first trade, you will need to put sufficient funds into your account.
  • Purchase GoPro stock. Begin trading and build your portfolio.

GoPro: Company and Stock History

GoPro designs, manufactures and markets durable action cameras for extreme conditions, as well as mobile apps and video editing software. Originally named Woodman Labs Inc., the company was founded in 2002 by Nick Woodman, a Californian surfer who invented the initial small camera that could be strapped to a surfer’s wrist and operated while surfing. 

The company’s first camera was sold in 2004 and used 35 mm film that required processing and developing. Subsequent models were developed for digital still and video cameras, such as the Digital Hero released in 2006. 

GoPro’s IPO occurred on June 25, 2014, when the company sold 17.8 million shares at $24 per share. The company was considered one of the best small cap stocks at the time of its IPO. 

In 2017, GoPro released the HERO6 and the Fusion cameras with significantly more features than the company’s original HERO, although the company also laid off 500 workers that year due to a recall of its first drone, the Karma, released in early 2016. 

Outlook for GPRO

Soon after its IPO, GPRO shares rose sharply to an all-time high of $93.85 in September 2014. After achieving that heady level, GPRO shares starting selling off and eventually lost most of their value. The stock hit an all-time low of $4.04 per share in December of 2018 after the company showed 4 quarters of negative year on year growth. 

GPRO stock complete price history. Source: Tradingview.

The original post-IPO decline in GPRO stock began in October 2014, shortly after making its all-time high. GPRO subsequently lost 2/3 of its value by March 2015, trading down to $37.13 per share. By the time GoPro began selling its Karma drone in January 2016, GPRO stock had dropped to a mere $11.23 per share. 

GPRO soon started running into problems after the release of its Karma drone, which the company recalled and eventually discontinued. The company showed negative earnings from September 2015 until September 2016, and then again from 2017’s 4th quarter until earnings eventually began improving after the last quarter of 2018. 

GoPro’s trailing twelve month, quarterly and annual growth rates and annual and quarterly revenue. Source: Macrotrends.

The stock’s most recent activity shows consolidation between the $5 and $7 per share level and according to Barron’s, major hedge fund D.E. Shaw has accumulated a 5% stake in the company with a total of 6.1 million shares. The big fund has purchased an additional 2.61 million shares since March of 2019, when it owned 3.52 million shares. This sort of buying interest underpins the stock.

GoPro seems to be on the upswing, reporting better-than-expected numbers for the first quarter of 2019. For the first quarter of 2019, the firm reported a smaller loss of -$24.4 million or $0.17 per share versus a loss of -$73.3 million or -$0.55 per share for 2018’s first quarter. 

For the remainder of 2019, GoPro expects revenues to increase by 7% to 10%, with its non- Generally Accepted Accounting Principles (GAAP) earnings currently expected to come in at $0.25 to $0.45 per share on margins of approximately 36.5%. GoPro’s 2019 second-quarter earnings are expected to be between $285 million to $305 million with anticipated earnings of flat to a positive +$0.06 per share on a non-GAAP basis. 

Why You Might Want to Buy It

  • GPRO Stock Price is Near Historical Lows: Though it traded down to $4 per share in December 2018, GPRO stock has since stabilized and found considerable support in the $4.80 to $6.50 level. This could present a buying opportunity for a patient long-term value investor.  
  • Accumulation by Hedge Funds: As the article mentioned above states, a major hedge fund, D.E. Shaw, reported accumulating large amounts of GoPro stock in June 2019. Hedge funds often accumulate stock in a company in advance of an anticipated merger, acquisition or news event, although this might just be a cheap stock purchase.  
  • Positive Future Earnings: Many analysts and GoPro’s own estimates are for positive earnings in the next quarter and moving forward. Improved earnings could be the catalyst that ultimately drives GPRO’s stock price higher.

Considerations Before You Buy

  • Possible Economic Downturn: A significant and widely anticipated slowdown in the U.S. economy could adversely affect camera sales and consequently, revenue and net income for the company. Any lower performance numbers would get reflected in GPRO’s stock price, which could then decline even further from its current low level. 
  • GPRO Competitors: While GoPro was the first of its kind when it came out, the market has since become saturated with excellent alternatives that have taken away considerable market share from GoPro. Cameras like the Garmin VIRB Ultra and the Sony FDR X3000R now offer comparable or better stabilization and video quality than GoPro’s offerings, while the Chinese manufactured Yi 4K camera offers most GoPro features at half the price. This loss of market share could continue to affect GoPro’s sales in the future and will ultimately weigh on its already depressed stock price.
  • International Tariffs: Due to the Trump administration’s trade dispute with China, GoPro began moving its production from China to Mexico. While this move would probably improve earnings in the long run, it will negatively affect earnings in the near term that could, in turn, put additional pressure on GPRO’s stock price. Also, if tariffs are imposed on Mexico, then the company may need to move production to the United States to avoid them.  

How to Buy GoPro Stock Using a Broker

To buy GoPro stock using a broker, you really just need a reputable stock broker that can execute stock orders on the Nasdaq (NASDAQ) exchange.

If you plan on buying GoPro stock just to keep as an investment in a trading account for the long-term, then you may want to pick a discount broker to save on commissions, although you would not get any of the extras you would enjoy by using a full-service broker. 

Online brokers vary on services and fees. While some brokers charge an inactivity fee for idle accounts, others offer account services at no cost. Keep in mind that how you buy GoPro stock is just as important as where you trade, so make sure you pick the right broker for your situation.

  1. Pick a Broker

    Knowing your needs before selecting a broker can make your choice a lot easier. For example, if you have a lot of experience in the market and take positions in other assets, you may need a high-end broker with an advanced trading platform, volume discounts and extensive research resources. 

    On the other hand, if you have limited market experience and need to expand your knowledge base, you might look for a broker with strong educational resources and a trading platform with a user-friendly interface you can easily operate.

    Some brokers will be able to fill your needs better than others, so be aware of what your needs are before making a choice. Here are our picks for a few of our favorite online stock brokers:

  2. Assess the Trading Platform

    The majority of online brokers provide a free demo or virtual trading account so you can make trades in the market without risking any money. Opening several of these demo or practice accounts with different brokers can give you a good sense of which broker’s platform and services best meet your needs.
     
    For example, TD Ameritrade’s platform has an interface that is easy to navigate and can be used by novice and experienced traders alike. Other brokers that are geared more toward seasoned and sophisticated traders, such as NinjaTrader and Interactive Brokers, offer advanced trading platforms and trading accounts with many other useful features. 

  3. Fund an Account

    Once you’ve selected a broker and practiced trading through its online platform, you can now fund your account. Some brokers have no minimum deposit needed to open an account, but each broker has different minimum requirements and account funding methods. Check with your chosen broker to make sure it’ll suit your budget and preferred account funding method.

  4. Start Buying GoPro Stock

    Once you’ve reached this step, it’s a great time to step back and watch GPRO stock for a few trading sessions to determine the best price to buy using technical analysis. Once you know how much you want to pay for the amount of stock you’d like to purchase, you can then either put a bid in the market for that amount at that price, or you can simply buy the stock at the best price currently available in the market.

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Is GoPro Stock for You?

Stocks of companies that have recently gone public often follow a certain price pattern, depending on whether the stock is well received or not. Among the companies that tend to be well received are high-tech and innovative companies that have not yet made money but which still have a cutting-edge product or desirable service. 

Underwriters tend to underprice the company’s stock in the initial offering and that, combined with the public’s overenthusiastic misperception of value and media hype, can make the stock rally to prices that fail to accurately reflect a company’s real worth at the time. 

Even Amazon stock, which had its IPO in 1997 at $18 per share, reacted in a similar fashion by trading over $100 per share in 1999, only to fall to under $6 per share in 2001. AMZN then consolidated by trading between $20 and $50 per share from 2003 until 2007. In 2008, the stock traded over $100, and it now trades vastly higher, at $1,869.67 per share.  

GoPro stock currently seems to be trading in the post-IPO crash consolidation phase, and it may range near present levels for some time. Going forward, how well GoPro continues to innovate and hold market share for its products will determine its growth prospects and, ultimately, the price of its stock. For a patient investor, GoPro stock may present a good long-term investment opportunity.

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