Is 2017 A Go For GoPro Inc (GPRO) Stock?

Restructuring Plan Under Way

When top-line performance comes under pressure, the go-to strategy for most management teams is to focus efforts on restructuring to drive efficiency and GoPro isn’t any different. GoPro announced a company-wide restructuring that will reduce full-year 2017 operating expenses to approximately $650 million and achieve its goal of returning to profitability in 2017. This ambitious restructuring plan includes the closure of its entertainment division, facilities reductions, and the elimination of more than 200 full-time positions (approximately 15 percent of the company’s workforce).

Also Read: Should You Buy GoPro Stock After The Strong Holiday Season Sales? GoPro Inc (NASDAQ:GPRO)

Lights, Camera, Competition

Competition is a real concern for GoPro Inc (NASDAQ:GPRO), although its international brand recognition and Intellectual Properties provide it with a semblance of defense. Competition is increasing as new entrants like Snap Inc. as well as the technological advancement of smartphone cameras provide the biggest threat to GoPro’s future.

Leadership and the ability of management to execute successfully will be heavily scrutinized as the failed and costly attempt to turn GoPro into a lifestyle brand and move into entertainment industry has given investors real cause for concern.

A 50% slump in the stock price may fool many into calling ‘the bottom’ and mark this as a buy-low-sell-high opportunity. However, investors would do well to wait for the Q4 report to establish whether GoPro is on track to meet its restructuring goals, the re-launch of Kama Drone, and the efficacy of management’s plans to expand its core offering as competition is set to intensify over the next few years.

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The article Is 2017 A Go For GoPro Inc (GPRO) Stock? originally appeared on amigobulls.com. Watch our analysis video on GPRO

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