Earlier this week, Xiaomi launched the Yi Action Camera for $64, about half the price of the entry-level GoPro Hero, which retails for around $130. GoPro shares fell about 5 percent on the news. The stock was down 4.8 percent to $41 in Thursday afternoon trading.
However, he notes that the less-expensive cameras usually don't offer 4K TV quality, an essential standard for GoPro, but he says user reviews indicate that they're just as good as GoPros.
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GoPro's growth outlook has changed pretty dramatically since last August when the company had a great product cycle in front of it, Fichthorn said. He expects the wearable camera maker to struggle with its margins and revenue growth going forward.
Fichthorn also is concerned about GoPro's media business, GoPro Channel, which he says seems more like a costly marketing ploy working to get users in the GoPro ecosystem—than an actual entity with growth potential.
If the media business turns out to be a marketing expense, there's an opportunity for "multiple compression."
GoPro shares have endured turbulence since the company went public in late June. After pricing at $24 per share, the stock floated to a high of $98 in October, only to give back much of its gains to trade in the low $40s.
The company currently has about 94 percent of the action camera market, according to Reuters. Sony comes next with market share of near 3 percent.