GoPro (NASDAQ: GPRO) stock price is on track to drop for four straight weeks as concerns about its growth continue. It has plunged to the record low of $1.78, giving it a market cap of over $266 million. At its peak, the company had a market cap of over $2.70 billion.

GoPro, one of the best hardware companies in the United States, is going through intense pressure as its sales slow.

This view was confirmed when the company published its last financial results. Its revenue came in at $295 million in the fourth quarter, down from $321 million in the same period in 2022.

Its annual revenue figures have also been moving in the wrong direction. It had revenues $1 billion in 2023, down from $1.1 billion in 2019. Analysts expect that its revenue will be $1.01 billion this year and $997 million in 2025.

At the same time, its margins have not been doing well. Its gross profit margin was 41.3% in Q4’21 and 34.4% in Q4’23. 

GoPro is facing a big problem because it is a one-product company. History shows that most hardware companies that succeed sell a few products. In addition to the iPhone, Apple also sells the Apple Watch, MacBook, and iPad.

Similarly, Garmin sells products like smartwatches and products for sports and fitness, automotive, marine, and aviation industries. Xiaomi sells smartphones, robots, and other items.

GoPro, on the other hand, sells wearable cameras, which are wildly popular. The problem with this is that these cameras last a long time and users rarely replace them. 

On the positive side, the company has a subscription service that provides features like cloud storage, photo editing, and live streaming. The subscription and service segment brought in $25 million in revenues in the fourth quarter.

GoPro has attempted to diversify its business in the past. Its most ambitious project was its drone business, which ended after the company faced substantial competition from DJI. 

Therefore, I believe that the company faces major headwinds in the coming years. On the positive side, the company has a strong balance sheet. It has over $227 million in cash and $92.6 million in long-term debt. That gives it room to improve its business.

GPRO chart by TradingView

The weekly chart shows that the GPRO stock price has been in a freefall after peaking at $13.75 in 2021. It has now crashed and become a penny stock. Most recently, it has moved below the crucial support level at $2.0, its lowest swing in March 2020. 

The stock has plunged below all moving averages while the Average Directional Index (ADX) has risen above 40. ADX is a popular indicator that measures the strength of an asset.

Meanwhile, the Relative Strength Index (RSI) and the Stochastic Oscillator have moved below the oversold level. Therefore, the outlook for the stock is bearish, with the next point to watch being at $1.50.

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