What Happened?
Shares of action camera company GoPro (NASDAQ:GPRO) jumped 3.2% in the afternoon session after the broader market rally after new economic data showed unexpected strength in the U.S. economy, easing investor concerns about a potential recession. Investors were encouraged by reports showing U.S. retail sales grew more than anticipated and weekly unemployment claims fell, signaling a resilient consumer and a steady job market. This environment is generally favorable for consumer discretionary companies like GoPro, as it suggests shoppers may be more willing to spend on non-essential items like action cameras.
Also, the second quarter (2025) earnings season got off to a strong start. Quarterly earnings reports released during the week exceeded Wall Street's expectations, fueling investor confidence. Around 50 S&P 500 components reported, with 88% of those exceeding analysts' expectations, FactSet data revealed.
After the initial pop the shares cooled down to $0.79, up 3.9% from previous close.
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What Is The Market Telling Us
GoPro’s shares are extremely volatile and have had 54 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock dropped 21.7% on the news that the company reported disappointing fourth-quarter results, with revenue plunging 32% y/y. The company also missed expectations on both next-quarter revenue and EPS guidance. The downturn was fueled by a 16% drop in camera sell-through as the company recorded a 34% slump in retail channel sales, which made up 74% of total revenue.
Despite the sales decline, gross margin ticked up slightly, thanks to lower product costs. However, this wasn't enough to offset the volume decline, leading to a non-GAAP net loss, compared to modest profits a year ago. Looking ahead, GoPro aimed to slash operating expenses by nearly 30% in 2025, while shifting its focus to higher-priced cameras to stabilize margins. Still, with ongoing revenue pressures, the company's outlook remains uncertain.
GoPro is down 28% since the beginning of the year, and at $0.79 per share, it is trading 52.6% below its 52-week high of $1.67 from July 2024. Investors who bought $1,000 worth of GoPro’s shares 5 years ago would now be looking at an investment worth $160.89.
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