Tech

GoPro shares hit all-time low

Investors are selling GoPro just as enthusiastically as they once bought it.

Thursday, the stock — once a Wall Street darling — nosedived to an all-time low. It's now down some 90 percent from its record high of $93.85 in October 2014.



GoPro bulls share their recommendations
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GoPro bulls share their recommendations

The latest news: GoPro pre-announced fourth-quarter revenue of $435 million, nearly 20 percent below the midpoint of guidance. Analysts had predicted $512 million.

In a letter to his employees, CEO Nick Woodman pinned the disappointing results on initially mispricing the company's Hero4 Session camera, which launched last summer.

Separately, GoPro also said that it is cutting its workforce by 7 percent, or about 100 employees.

"This was a difficult and deeply emotional decision," Woodman said. "But it was a necessary one."

So, what can the company do now to win back investors?

Alex Gauna of JMP Securities, who rates GoPro a "buy," said Woodman must learn from his mistakes in 2015 and release a new camera that is more reasonably priced with stronger features.

"With some $1.5 billion a year in revenues and $450 million in cash," Gauna said, "GoPro can still invest in technology and their brand in ways many others can't."

Analysts also say GoPro must release software that makes it easier for consumers to edit and share content. And the soon-to-be-released GoPro drone needs to be a hit.

Charles Anderson of Dougherty & Co. estimates the new drone will generate $17 million in sales for the camera company this year.

Anderson maintains a "buy" on the stock with a price target of $13, but does say GoPro faces real challenges in the months ahead.

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"GoPro has to win credibility back with investors and consumers," Anderson told CNBC. "People don't have a lot of patience with it."

After such a nosedive in the stock, some investors might also question whether Woodman remains the right CEO for the company.

Gauna says the surfer turned entrepreneur committed serious mistakes in management and leadership in 2015. But, for now, he believes Woodman remains the most credible chief executive to lead GoPro.

"We still assume Woodman has the youth, energy and imagination to lead the company," Gauna said. "He is the right guy at this juncture."