GoPro’s near-50% fall this year means the wearable camera maker’s stock is trading at its most realistic levels for the first time since the company went public in June 2014 according to Japan-based investment boutique, Regency Associates.

After debuting at $24, GoPro’s stock surged more than 30% on its first day of trading. The gains continued with the shares trading at within a whisker of $100 in October 2014 – a 300% jump in 4 months – but this year, investors have sold the stock mercilessly as concerns the company and its products are little more than a fad.

“We could never understand the fundamentals underpinning this stock. GoPro makes a range of cameras you can bolt onto a helmet or other items while you go riding, kayaking or climbing. How did that ever translate into a $10bn market capitalization,” asked Ahiro Noda, technology strategist at Regency Associates.

While concern the company and its extreme sport following is merely a fad is proving troublesome, Regency Associates believes there are other factors at play in the stock’s breathtaking decline. “Their products are very vulnerable to competition from some fairly big players including Sony and Panasonic,” explained Noda.

The firm also points out the threat from manufacturers of a new breed of drone that follows users recording their activities.

“Users showing 1st person videos of their activities are popular but these new follow-me drones actually show the user in the recording rather than just what they saw and GoPro doesn’t have a product that can compete. The market is changing and GoPro could be left behind,” said Noda.

Regency Associates says it expects the stock to trade lower in the coming weeks but it doesn’t expect prices to retest the IPO price of $24.

About Regency Associates
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