The score will take care of itself ~ Bill Walsh

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Is GoPro Worth a Second Look.

 

You know a long time ago, I advised the president of a public company to invest in goPro over a dinner conversation (#humblebrag). He was like why the hell would I invest in this shit (I’m paraphrasing here). At the time there were serious positives in investing in GoPro and I actually did make money. However, not much of their business has changed since then and it can be viewed positively or negatively, depending on your own perspective. Let’s talk about their pros then cons. 

 

(If you prefer to watch me, check us out here: https://youtu.be/5m7lkV60biA)

 

Pro #1

GoPro has brand love like nobody’s business. They grab inspirational people to rep their products so as to motivate us wannabes to buy so that we can be one step closer to becoming an action hero. It is a page straight out of the Nike playbook and it works. 100%

 

Pro #2

GoPro, imo, is actually more of a software company than hardware and that’s a good thing. Anybody can put together indestructible tiny hardware, but with amazing video process, streaming and now cloud storage subscription, it makes them a lot more interesting now. Most companies that have added a cloud storage subscription started making CRAZY amounts of money because of it. It’s a great opportunity to upsell.

 

Pro #3

The 3rd new pro is that if you’re looking to indirectly invest into police bodycams, goPro has a partnership with Intrinsic to do just that. They probably partnered to get the right foot as getting governments to pay for things is a tricky business. But if they succeed, this can be quite a juicy revenue stream.

 

I do think their business have flaws though. As it stands, they are just too niche:

 

Risk #1

Their innovation seems to be limited by their reach. That is to say they have brand love for a very specific crowd of people and that set of people is willing to upgrade to the latest greatest because they constantly create high quality stuff that’s worth upgrading. However, this to me also means that until they can change this, they will never get explosive growth, because they’re just finding new ways of making money off of the same set of people. Yes, going into government contracts is a good start, but there is a lot of pure players in that space already (check my other vid for this). I’d like to see them dive into non-extreme sports side of things, where regular folks can see the value ad of GoPro and are incentivized to buy.

 

For example drones. I know they ate shit the last time they did this, but that was a hardware issue and a lot has changed. People are already jerry jigging GoPros on drones so why not just dive in guys. It is pretty funny that they’re still issuing updates to fix their 2018 problems though.

 

Risk #2

I think it’s good that they are fully aware of the fact that hardwares can only take you so far, which is why they are now in the cloud storage game and also innovating hard on the software side of things, but competition is fierce. If you just type “goPro vs” it’ll autocomplete with a shit ton of alternatives.

 

Risk #3

gopro analysis expectations wishy washy at best
gopro analysis expectations wishy washy at best

Lastly, their finance is pretty wishy washy, not always hitting analyst expectations. This also brings danger to your investment because stock investing is about predictability and future-looking pricing. Good surprise leads to explosive stock value. Wishy-washy leads to people looking for more predictable opportunities.

 

Summary

All in all, Explosive growth involves you creating value so that you add BIGGER chunks to your pie and so far, I’m not seeing anything interesting. The bodycam play might pan out if they start announcing sales so there is a speculation play there, but in terms of more value from the product side, I think they’ve slowed with no new worthwhile directions. 

 

I think the best thing that can happen to them is to sell themselves to the almighty Google, as this can EASILY be retrofitted into the IOT space and then start leaning hard into android and all of Google’s tentacles of resources, reach, and marketing.

 

In the meanwhile, I still find this company compelling but I think I’ll be sitting on the sidelines for a bit more because COVID v2 is scarying the shit out of me.

 

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