Go Pro Shares Plunge 30% As Demand For Wearable Cameras Wanes
Earlier this year research Companies were forecasting “big growth” for wearable action cameras resulting in several brands including Sony and Panasonic expanding their offering in this market.
Also jumping into the market were several distributors of Chinese made action cameras.
On Friday shares in Go Pro fell a further 4%, they are now down more than 30% this month.
Last year the wearable action camera market grew by 44% year on year in 2014, reaching 7.6 million units, with a retail value of $3.2 billion.
The big winner was Go Pro, now sales of premium brand wearable action cameras is slowing.
Currently consumer sales, mainly for extreme sports has accounted for the vast majority of worldwide demand, however professional sales did accelerate, driven mainly by TV production, emergency services, and security use.
In the USA Go Pro shares hit $32.42 on Friday, their lowest closing price since June 26, 2014 the day of GoPro’s initial public offering.
Ambarella the owner of the Go Pro brand saw shares declined 8.2% on Friday and have fallen nearly a third this month.
Last year, GoPro debuted new cameras in the third quarter; this year, it introduced new devices in the second quarter.
“It’s sort of a mystery to us why the stock is down so much,” analysts said.
Pacific Crest Securities analyst Brad Erickson said investors have been spooked by the Ambarella guidance and other third-party data that show recent declining sales of wearable cameras. “It may prove to be an overreaction, but it could also get worse,” he said. Mr. Erickson has a neutral rating on GoPro.
GoPro swung to a $35 million profit in the second quarter, compared with a $19.8 million loss a year prior. Analysts expect the company to record net income of $204.5 million this year.
GoPro is facing new competition in the wearable-camera business from traditional camera makers like Sony and new entrants such as Chinese smartphone maker Xiaomi. In response, GoPro is attempting to diversify, including plans to soon release a consumer drone.