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GoPro, Inc.

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GoPro has been aiming at transforming itself from the ‘camera maker’ to ‘content maker’ and has taken significant steps to diversify into higher-margin businesses, including video editing and virtual reality. It is also making strategic investments in talent, technology, software and innovative products for quite some time now. Also, It has significantly reduced its operating expenses, on a year-over-year basis. However, majority of the company’s revenues come from capture devices, exposing it to the risk of high product concentration. GoPro has been experiencing huge competition between new and old products, threatening to drag down top line growth due to product cannibalization. Further, GoPro continues to invest in research and development to maintain its dominant market share, potentially putting pressure on margins. Over the past six months, shares of the company have significantly underperformed the industry.

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