DeepValue | The New Way Investors Work

At today’s price around $0.81, GoPro stock sits squarely in “high-beta turnaround” territory. The market is essentially asking investors to bet that a new 360/hardware cycle, a creator-focused software stack, and early AI initiatives will offset shrinking subscribers, tariff pressure, and a tight balance sheet.

From our perspective as deep-value investors, this is exactly the kind of setup that looks tempting on a chart but can quietly destroy capital if you underwrite it like a normal consumer-tech recovery. The company’s own filings, management commentary, and financing terms all tell a more constrained story.

We walk through that story below: how GoPro earns money today, why subscription growth has stalled, what its new AI data-licensing angle could be worth, and—most importantly—what has to go right in 2026 for equity holders to make money instead of becoming collateral damage in a covenant-driven restructuring.

If you’re thinking about building a position in GPRO, the key question isn’t “Is this cheap?” but “Is the risk/reward skewed enough versus the real probability of a financing or covenant event?”

Go beyond headlines and marketing decks with a fully cited, institutional-grade deep dive on GoPro’s filings, risks, and scenarios in minutes, not days.

Run Deep Research on GPRO →

GoPro’s Business Today: More Than Just Action Cameras?

GoPro’s story has evolved from being “the action camera company” to a hybrid hardware–software model with an aspirational subscription flywheel.

According to the 10-K (2025), p.39, GoPro generates revenue from:

Cameras and accessories (the classic HERO/MAX hardware line)
Subscription and service offerings (Premium+, Premium, Quik, and related support)

Revenue is reported net of returns and incentives like cooperative advertising and price protection. Subscriptions and post-contract support are recognized ratably over time, which helps gross margin mix but only if the installed base grows and churn stays in check, as outlined in the 10-K (2025), p.69.

Management’s intended narrative is clear: position GoPro as an “integrated capture-to-edit-to-cloud workflow” platform, not just a device vendor. The 10-Q (2025), p.34 emphasizes mobile and cloud-based storytelling solutions as the path back to sustainable profitability.

But the numbers tell us that this software story hasn’t yet turned into a durable revenue engine.

FY2024 subscription and service revenue was $107.0 million, 13.3% of total revenue, up from below 10% in 2022–2023, per the 10-K (2025), p.69.
For the nine months ended September 30, 2025, subscription and service revenue was flat at $79.7 million vs the same period in 2024, according to the 10-Q (2025), p.10.
Management explicitly states that “growth in subscribers and subscription and service revenue has slowed” in the 10-Q (2025), p.34.

In other words, mix is improving, but dollars are not. That disconnect is central to our cautious stance.

What’s Actually Happening to GoPro’s Subscribers?

The subscription flywheel is supposed to be GoPro’s stabilizer—smoothing out boom-bust hardware cycles with recurring revenue. Right now, it’s not doing that.

By Q3 2025, GoPro reported:

2.42 million subscribers, down 5% year over year
Quarterly subscription & service revenue of $27 million, down 3% year over year

Those figures are highlighted in both the Q3 2025 earnings release, Nov 6 2025 and the management commentary, Nov 6 2025.

What makes this particularly striking is that operational engagement metrics look okay:

Attach rate improved from 54% to 57% sequentially in Q3 2025
Annual retention reached 68%, up from 67%

These metrics are disclosed in the 10-Q (2025), p.33 and reiterated in the Q3 2025 commentary. So attach is going up, retention is decent, but overall subscribers and subscription revenue are falling.

Our interpretation:

Attach and retention are not the problem; the underlying camera base is shrinking.
Promotions and bundles can push attach higher, but if unit volumes trend down and fewer new users enter the ecosystem, total subscribers still decline.
That makes the subscription model look more like a levered add-on to hardware, not a standalone growth franchise.

Management has guided to renewed subscriber and subscription growth in 2026, as discussed in the Nov 6 2025 commentary. For us, that’s now a binary checkpoint: if by mid-2026 subscribers are still down year over year and subscription revenue hasn’t turned positive, the “workflow flywheel” thesis is effectively broken.

Is GPRO Stock a Buy in 2026—or a Wait?

We currently frame GoPro as a WAIT with moderate conviction, anchored around three price levels:

Attractive entry: $0.65
Trim/avoid chasing: $1.30+
Our base-case implied value: $0.90

Why that stance?

1. Scenario analysis: upside exists, but financing risk dominates

Our scenario work suggests:

Base case (45%)

Implied value: $0.90

Assumes channel inventory normalization supports steadier retail reorders after four quarters of reductions, and units stabilize. Subscription revenue returns to low single-digit year-over-year growth by mid-2026.

Bear case (35%)

Implied value: $0.55

Assumes aggressive 360 competition (notably DJI and Insta360) forces structural discounting, compressing gross margin. Sell-through stays down double digits year over year, and subscriptions remain below 2.4 million through 2026.

Bull case (20%)

Implied value: $1.40

Assumes AI data licensing becomes a real, disclosed revenue line with signed customers and high gross margin. Subscribers exceed 2.6 million and adjusted EBITDA tracks toward $40 million TTM by year-end 2026.

The issue is not that upside doesn’t exist; it’s that downside is shaped less by gradual fundamentals and more by binary financing outcomes.

2. No real margin of safety at the equity level

The 10-Q (2025), p.8 includes explicit going concern language tied to:

Executing the 2025 operating plan
Repaying the 2025 Notes (convertible debt) due November 15, 2025

As of September 30, 2025:

Cash and marketable securities: $153 million
Restricted cash: $94.3 million earmarked for that convertible repayment
Revolver: fully drawn (up to $50 million), maturing January 2027

To bridge the maturity, GoPro took on a $50 million secured term loan with:

A minimum liquidity covenant (generally $40 million, with potential step-down)
Escalating EBITDA thresholds ramping up to $40 million TTM by late 2026
Warrant coverage of 11,076,968 shares at $1.25 per share

These terms are described in detail in the GoPro term loan press release, Aug 4 2025.

For equity investors, that structure has three consequences:

1. Downside is not cushioned by assets or earnings. Financial metrics from FMP show a negative P/E (-1.05), EV/EBITDA of -2.22, EPS of -2.82, and interest coverage of -19.02. There is no valuation floor from stable profits.

2. Value has shifted toward creditors. The secured position plus warrants mean that if performance is mediocre, more of the enterprise value accretion goes to debtholders.

3. Risk is binary. A covenant breach or liquidity squeeze could force a dilutive recap or worse; there is little room for a soft landing.

In our view, you cannot treat GPRO as a typical “cheap small-cap” with time to wait out a cycle. Position sizing should assume that financing/covenant outcomes dominate the distribution.

Use [DeepValue](https://app.deepvalue.tech/) to run side-by-side scenario work on GoPro and its peers, with every covenant detail and risk factor pulled directly from SEC filings so you can size positions precisely.

See the Full Analysis →

How Healthy Is GoPro’s Core Hardware Business?

The hardware side is where both risk and potential recovery sit.

Sell-through vs channel inventory

In Q3 2025, GoPro launched:

MAX2 (new 360 camera)
LIT HERO
Fluid Pro AI features

Despite these launches, Q3 2025 performance looked rough:

Revenue: $163 million, down 37% year over year
Sell-through: ~500,000 units, down 18% year over year

Management highlighted that channel inventory was down 30% year over year, with four consecutive quarters of reductions, per the Nov 6 2025 earnings release and commentary. That’s the good news: future sales are more likely to reflect true end-demand, not channel stuffing.

The bad news is that the sell-through decline is still steep, which raises the possibility that lower channel inventory is being driven by weakness in demand, not by disciplined planning alone.

Our near-term checkpoint: by the next couple of quarters (through roughly May 2026), we want to see:

Sell-through no worse than flat to modestly down year over year
Continued channel inventory improvement
Avoiding a repeat of the Q3 2025 pattern (revenue down 37% y/y, sell-through down 18%)

If those metrics don’t stabilize, the turnaround narrative shifts toward clearance and promotions rather than a healthy new cycle.

Tariffs, promotions, and gross margin pressure

GoPro’s filings explicitly tie gross margin to:

Promotional intensity
FX movements
Tariff costs

According to the 10-Q (2025), p.37, gross margin in the first nine months of 2025 benefited from:

Reduced promotional activity
Higher subscription mix

But it was also pressured by higher camera costs and higher tariffs. Critically, tariffs on U.S.-bound cameras made in Thailand and Malaysia rose from 10% to 19% in August 2025, as detailed on 10-Q (2025), p.56.

Mitigation options—raising prices or shifting production—take time and capital, and are constrained by GoPro’s financing position. If GoPro has to lean more heavily on discounts in a tariff-heavy environment, gross margin could compress right when EBITDA needs to ramp for covenants.

This is why we monitor any management commentary that hints at “higher promotional activity” and tariff pressure without clear offset; those phrases in future filings would be a red flag.

Will GoPro Deliver Long-Term Growth from Subscriptions and AI?

Management’s long-term ambition is to shift value from hardware cycles to a higher-margin subscription and AI-driven model. We think investors should separate narrative from evidence.

Subscription and service revenue: directionally promising, but stalled in dollars

The strategic goal is to scale subscription and service revenue well beyond the FY2024 level of $107.0 million (13.3% of revenue) and make it a durable profit contributor, as outlined in the 10-K (2025), p.69.

Yet the current evidence shows:

Nine months of 2025 subscription and service revenue flat at $79.7 million vs 2024
Management explicitly saying that subscription growth has slowed
Q3 2025 subscribers down 5% y/y and subscription & service revenue down 3% y/y

Attach and retention numbers are good enough that, if unit volumes stabilize, subscription growth could re-emerge. But until we see actual year-over-year growth in both subscribers and subscription revenue, we treat the software flywheel as unproven.

AI data licensing: real optionality, not base case

One of the more interesting new angles is AI data licensing. GoPro has:

Accumulated 270,000+ hours of user-contributed content for AI training datasets
Offered a 50% revenue share to participating subscribers for third-party licensing

These details come from the Nov 6 2025 management commentary. The idea is straightforward: turn GoPro’s massive content archive into training data for computer vision and other AI models, capturing high-margin licensing income.

For now, this is optional upside, not a de-risking factor:

There are no disclosed signed customers or recognized revenue lines for AI data licensing yet.
GoPro needs to move from “discussions” to actual contracts and reportable revenue, including unit economics like take-rates and gross margin.

We’d view a disclosed AI data-licensing revenue line with named customers by mid-to-late 2026 as a genuine upgrade to the thesis—both for EBITDA and for narrative re-rating.

If you want a systematic way to track whether these kinds of optionality stories are actually moving the needle in the numbers, Read our AI-powered value investing guide. It walks through how tools like DeepValue can parse filings and industry sources to cut through buzzwords and focus on evidence.

Competitive Landscape: Can GoPro Keep Up in 360 and Creator Workflow?

The competitive pressure on GoPro is most acute in 360 cameras and software.

360 cameras: from niche to mainstream battleground

Industry coverage now treats 360 cameras as a mainstream, must-have category for creators rather than a niche curiosity. The Digital Camera World 360 cameras overview, Jan 2026 argues that 360 adoption accelerated in 2025, which should theoretically benefit all players.

But:

GoPro delayed MAX2, and management links the delay to weak FY2024 and 2025 YTD results in the 10-Q (2025), p.31.
Competitors like DJI and Insta360 increased cadence and spec claims, with products like the DJI Osmo 360 highlighting 8K up to 50fps and strong thermal/battery performance, according to The Verge, Aug 2025.

Coverage of MAX2 is mixed:

Reviews from TechRadar, Oct 2025 and The Verge, Oct 2025 praise durability and daylight performance, but often note that software sophistication lags Insta360 and DJI.

GoPro has already shown willingness to cut prices in 360, slashing the older Max to $349.99, as noted by TechRadar, Feb 20 2025. This sets a precedent: if MAX2 underperforms, a new round of structural discounting could be required.

Our takeaway: GoPro can remain a credible 360 player, but doing so while constrained by lender covenants is challenging. It can’t simply outspend rivals on marketing or software; the products and workflow need to stand on their own.

Workflow and creator tools: potential differentiator, still maturing

On the positive side, GoPro is investing in workflow:

Plugins for DaVinci Resolve and existing Adobe integrations
Quik app tools, including AI subject tracking and cloud-based 360 editing

These features, documented in the Nov 6 2025 earnings release, the management commentary, and the 10-K (2025), p.35, support higher attach and retention—if the underlying units and brand affinity remain strong.

But these are incremental positives rather than thesis changers. Without visible subscriber and revenue growth, we treat them as “good operational hygiene” rather than a competitive moat.

Balance Sheet, Covenants, and Insider Selling: Key Risk Signals

We think GoPro’s risk profile over the next 12–18 months is defined more by balance-sheet structure and insider behavior than by incremental product news.

Term loan covenants: what needs to go right

The $50 million secured term loan has two key operational constraints, as detailed in the Aug 4 2025 term loan release:

Minimum liquidity covenant: $40 million (with a possible step-down to $30 million if leverage falls below 1.0x)
EBITDA ramp:
At least $10 million minimum for the quarter ending December 31, 2025
Ramping to $40 million for any four-quarter period ending on or after December 31, 2026

Management itself references a target of $40 million trailing-12-month adjusted EBITDA by year-end 2026 in the Nov 6 2025 commentary, aligning directly with these covenants.

Our interpretation:

Investors are not just betting on a product turnaround—they’re betting GoPro can hit lender-defined EBITDA thresholds while managing tariffs, competition, and subscription softness.
Missing these ramps doesn’t just mean “slower growth”; it means higher risk of default, forced renegotiations, or equity dilution.

Insider trading: one notable discretionary sale

Insider activity matters more in fragile situations. Our review of Form 4s flagged unusual patterns:

On August 20, 2025, EVP, CFO & COO Brian McGee reported an open-market S-sale of 150,043 shares at $1.2434, leaving him with 779,974 shares.
In contrast, many other transactions around that time were F-type administrative activities tied to awards/withholding at fixed prices.
McGee later reported a much smaller S-sale of 4,579 shares at $1.57 on November 20, 2025.

We don’t over-interpret one sale, but the relative size versus remaining holdings makes it worth monitoring. The next step for investors would be to:

Read Form 4 footnotes to see if the sale is under a 10b5-1 plan or tied to vesting-related taxes.
Compare this pattern to McGee’s historical trading behavior.
Cross-check timing against earnings, guidance changes, and financing announcements.

In highly levered, covenant-constrained stories, discretional insider selling—even if small in dollar terms—deserves extra scrutiny.

Let our deep research engine parse every 10-K, 10-Q, 8-K, and Form 4 on GoPro so you can spot covenant risks, insider patterns, and red flags before the market reacts.

Research GPRO in Minutes →

How We’d Approach GoPro as Value Investors

For us, GoPro sits in a narrow band: too risky to own aggressively today, but too interesting to ignore. Here’s how we’d think about it in a portfolio context.

When we’d get more constructive

We’d be open to upgrading our stance if we see, by mid-to-late 2026:

1. Evidence of real subscription reacceleration

Subscriber base at least flat, ideally positive, year over year by the August 2026 window
Subscription and service revenue back to clear year-over-year growth

These would validate management’s 2026 inflection expectations from the Nov 6 2025 commentary.

2. Hardware stabilization without destructive discounting

Sell-through no longer down double digits year over year
Gross margin commentary that doesn’t revert to “higher promotional activity” as a driver
Channel inventories continuing to trend down or stay lean

3. Covenant comfort

Evidence that EBITDA ramps are being met or on track
No signs of liquidity scraping the $40 million minimum

Tangibly, that would mean quarterly results showing positive operating cash flow (like the +$12 million in Q3 2025) and clean covenant commentary in filings.

4. Optionality turning into revenue

Disclosed AI data-licensing revenue line(s) with signed customers and clear economics
Subscription and workflow features translating into higher ARPU, not just better attach

If two or more of these boxes get checked without any covenant drama, we’d view pullbacks toward or below our $0.65 “attractive entry” line as compelling.

When we’d step aside or exit

We’d treat the thesis as broken and either avoid or exit if:

Subscribers remain meaningfully down year over year by mid-2026, and subscription & service revenue is still flat or negative.
We see repeated quarters of sell-through down double digits while ASPs and promotions do the heavy lifting on revenue.
Any filing hints at liquidity dipping near covenant minimums or at renegotiations with lenders under pressure.

In that world, GoPro reverts from “optional turnaround” to a levered, episodic hardware story with constrained flexibility and diminished equity value.

Final Thoughts

GoPro is exactly the kind of name that screens cheaply and attracts turnaround hunters, especially with a visible brand, AI buzzwords, and a stock price under $1. But our reading of the 2025 10-K, the Q3 2025 10-Q, and management’s own commentary pushes us to be more conservative.

The equity today has:

No real earnings backstop
A capital structure that hands a lot of future value to creditors
A subscription narrative that is compelling in theory but flat in dollars
An AI opportunity that is promising but not yet monetized

For patient, risk-tolerant investors, GoPro can be on a watchlist with clearly defined triggers. For most portfolios, though, it’s a name where disciplined waiting—rather than trying to pick the exact bottom—is likely to produce better long-term outcomes.

GoPro, Inc. (GPRO) Deep Research Report: High-Risk Turnaround or 2026 Recovery Story for Patient Investors?