GoPro Inc: A Broken Stock, Not A Broken Company

GoPro Inc GPRO has been beaten down substantially over the last six months. The stock was trading in the mid $60s back in August, but has fallen nearly to single digits.

With the company due to report earnings after Wednesday's close, some investors are still wondering what to do with the once-$90 stock.

Wedbush analyst Michael Pachter spoke earlier this month about GoPro, nothing he still believes in the company.

Broken Stock, Not Company

"We got a broken stock and not necessarily a broken company," Pachter told CNBC on January 14. "[B]ut investors are going to have trouble trusting the management. The fact is they screwed up on their product strategy. They launched a new motion capture device every fall for three years running; This fall they tried to get cute and it didn't work with consumers."

Related Link: GoPro Inc Could See Downside Under $9 If This Happens

Hero4 Session

Pachter was referring to the Hero4 Session, which he called "priced too high, two price cuts later and a bad miss later, people throw these guys out and assume they're dead."

GoPro acknowledged it will have a new product refresh this fall and, Pachter continued, "so I think you're going to see a return to revenue and earnings growth. I think a growth stock deserves a near market multiple a discount because of poor execution. I have a 14 multiple, that gets me to $18. [If] the stock was at $20 I wouldn't have a buy, but it's at $12."

GoPro traded recently at $10.25.

Quadcopter = $100 Million

"I'm in this for the long haul. I think this is a pretty good company and I think the stock is just a pretty bad stock right now," Pachter said. "If the quadcopter takes off, I think it adds as much as $100 million a quarter and is immensely profitable."

GoPro's quadcopter has been teased for nearly a year. It's expected to be released in the first half of 2016.

"Wait until April or May, get in in front of the quadcopter. I think they're going to deliver."

Pachter thinks the market for motion capture is huge: "They just blew it with one product. Once."

"I think people are valuing this like Sony in the television business, and that's fair," Pachter concluded. "[But] I think the stock is down going down."