Today, we don't even think twice about shooting videos. Long gone are the days of bulky video recorders and cassette tapes the size of MacBooks. Now, all we do is pull out our phones or GoPros! The GoPro camera goes where the iPhone cannot and has thus become a favorite for thrill-seeking millennials all over the world. The GoPro has truly revolutionized the way we capture our lives. However, if you look at GoPro’s stock, it took a tumble of about 40% from August 2015 to August 2016 and finally surged these last few weeks. So, what is going on here? And why did it all of a sudden surge 16% this past month?

The stock of the company is usually valued on a few key metrics, one of them being earnings per share (EPS). This is the company's total profits divided by the number of common stock shares, for example if a company earned 1 million dollars and had 1 million worth of stock then its EPS would be $1 per a share. Now, GoPro a company that from the outsider’s views seems like it would be profitable, but it has not been, in fact they have been reporting negatives earnings this whole past year and even to this day they are still reporting negative earnings. 

Why Did It Go Up?

GoPro, surged for two main reasons:

• ·       Ironically, they lost less than expected
• ·       High hopes pinned on their new product the "Karma Drone"

Number one, the market has analysts who predict how much a company is going to gain or lose. In this case, anlaysts predicted that GoPro would lose 0.58 a share. In fact, GoPro only lost 0.52 a share, which in most cases would not help a stock but with a stock like GoPro that was down 40% it only helped. Number two, the promise of the new "Karma Drone" increases the hopes of investors who are looking to cash in on the potential of the company. This increase in hope boosts the demand for the stock. Did somebody say, "rumor has it"?

So, the next time you look at a stock consider why it will be going up or down by looking at some of these factors. No matter how good a company may look from the outside, the EPS really helps investors determine if it is time to buy or sell a stock.  

Stocks aside, I am excited to see all the footage that continues to be captured on the GoPro cameras. Here at Orca, we love living in and capturing moments that make us leap! Readers, send your best GoPro video link to here and we will feature it on our blog!

This by no means is a recommendation to buy GoPro Stock, Rohan Thakkar owns shares of GoPro.