GoPro collapses with a 40% drop in revenues, the worst downturn in its history

Despite the image they want to give dynamism and everything is better than ever, the reality is that things are not going well, nothing good in GoPro, who just introduced disastrous financial results for the third quarter of 2016, which they were well below forecasts of analysts that caused the company’s stock to plummet by 23%, the worst drop in the history of the company.

The stock market crash led the company to suspend operations so as not to suffer further damage, but in that lapse of nearly an hour the company lost nearly $ 250 million from a value of $ 1.30 billion to $ 972 million. The main reason was that GoPro presented revenues of 240.56 million dollars, while the same period last year income barely exceeded 400 million, which means a total drop of 39.9%.

GoPro

Image Source: Google Image

Competition begins to tighten

Analysts and investors expected a decline in revenue following the trend of what the company has presented throughout the year; however, no one imagined that the fall out of such magnitude.

This is mainly because the market has matured and there are several options, especially cheaper, about what GoPro offers Chinese brands with good quality at less than half price, this excluding accessories manufactured by third parties Who are the perfect choice for what GoPro has in the market.

Despite this, Nick Woodman, CEO of the company, has come to try to calm the mentioned waters in 2017 hope to return to the path of profitability, plus it stressed that its current products, among which are the drone Karma and cameras Hero5 Session and Black, “are the best in its history and consumer demand is very strong.”

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Note that in the numbers presented by GoPro are not yet reflected sales of its new products, since they went on sale a week before the closing period, so the next quarter could be facing a slight recovery and to calm the Nervousness that is currently and that is putting at risk the future of the company.

So far this year the company’s shares have fallen by 34%, which is also causing a change in forecasts, as GoPro estimated revenues between 600 and 650 million for the last quarter, when analysts Expect at least 657 million, and are changing their annual income forecasts to between 1,250 and 1,300 million, while previous estimates were between 1,350 and 1,500 million.

Things are not simple for GoPro, it ceased to be the king of action cameras and its entry into the drones market has left a bittersweet flavor, so the company will need something stronger to rebound, a strategy that makes them draw the attention of consumers, as today GoPro is in freefall and seems to find a way to put brake.

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