Investment Thesis
GoPro exhibits critical financial distress with negative stockholders' equity (-$1.9M), indicating technical insolvency. The company is burning cash operationally (-$36.6M), has severely impaired liquidity (0.58x current ratio), and faces a collapsing business model with a 4.3% gross margin unable to support its cost structure, resulting in an -81.6% net margin. Without immediate operational restructuring or external capital, the company faces potential default on short-term liabilities that exceed liquid assets.
Strengths
- Absence of long-term debt reduces refinancing risk
- Positive cash balance of $40.7M provides temporary operational runway
- Established brand position in action camera market suggests recovery potential with restructuring
Risks
- Negative stockholders' equity of -$1.9M indicates balance sheet insolvency
- Operating cash flow of -$36.6M demonstrates unsustainable cash burn
- Liquidity crisis: current ratio of 0.58x cannot cover short-term obligations
- Revenue declining 18.7% YoY while operating losses persist at -$57.2M
- Gross margin of 4.3% insufficient to cover operating expenses; fundamental business model failure
- Negative free cash flow of -$37.7M with no path to profitability visible
Key Metrics to Watch
- Gross margin expansion (currently at critical 4.3% level)
- Operating cash flow trajectory and burn rate
- Stockholders' equity recovery toward positive territory
- Revenue stabilization and return to growth
- Working capital and liquidity cushion (months of runway remaining)
- Operating expense reduction as percentage of declining revenue
Financial Metrics
Revenue
99.1M
Net Income
-80.8M
EPS (Diluted)
$-0.50
Free Cash Flow
-37.7M
Total Assets
381.4M
Cash
40.7M
Profitability Ratios
Gross Margin
4.3%
Operating Margin
-57.8%
Net Margin
-81.6%
ROE
N/A
ROA
-21.2%
FCF Margin
-38.0%
Balance Sheet & Liquidity
Current Ratio
0.58x
Quick Ratio
0.38x
Debt/Equity
N/A
Debt/Assets
100.5%
Interest Coverage
-25.64x
Long-term Debt
0.0
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-13T08:31:53.970377 |
Data as of: 2026-03-31 |
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