Robinhood Traders Love GoPro Stock; Should You?

GoPro, Inc. (NASDAQ:GPRO) is most well-known for its action camera products, but has also developed its own mobile app and video-editing software. At its peak in popularity, GoPro stock reached an all-time high of $93.85, but has since fallen off in quite the dramatic fashion. But does this mean the wearable tech maker is at an intriguing entry point?

GoPro stock continues to rank amongst Robinhood’s 100 Most Popular Stocks being traded on the commission-free broker platform. GoPro announced that it had officially surpassed the 670,000 subscriber mark due to strong e-commerce sales at the end of November, and the company anticipates further significant growth again throughout this month. This solidified the company's potential for ongoing subscription revenue.

GoPro stock has more than doubled in value in 2020, with the two most recent pullbacks contained by its 30-day moving average. Yet despite the steady gains, analysts remain on the sidelines, with four of the five analysts in coverage maintaining "hold" or "strong sell" ratings. 

GoPro stock reported earnings on the third quarter of 2020 last month, and GPRO outperformed expectations by a margin of $0.14 cents, or a whopping 233%. GoPro reported an earnings per share of $0.20 for the third quarter.

Let's break down GPRO's fundamentals from a longer-term perspective. GoPro has scaled down its operations and, seemingly, its ambitions over the past decade. The company’s focus on reducing expenses has allowed GoPro to improve its net income significantly, despite a lack of significant revenue growth. Although GoPro has posted a net loss of $15 million in the past twelve months, the company is now within reach of profitability when compared to the $419 million in net losses the company took in 2016. Overall, it is unclear just how much GoPro will be able to squeeze out in profits by just cutting costs, but there may be potential in the newly launched GoPro Plus subscription service.

Now may be an attractive time to take advantage of the security's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 73% sits in the 8th percentile of its annual range, meaning GPRO is now pricing affordably priced premiums.