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Morgan Stanley analysts think GoPro's new tiny camera was a flop, and now the stock is tanking.
Shares fell more than 8% to an all-time low of around $27.52.
GoPro launched the Hero4 Session in July, touting it as its most compact and most convenient camera yet.
But according to Morgan Stanley's James Faucette and team, the camera has been a hard sell.
The analysts cut their price target on the stock to $35 from $62, nearly 50%, with an "equal-weight" rating on the stock.
They wrote in a note Wednesday:
"Following up, our most recent checks were decidedly more negative as customers prefer the Silver’s LCD screen and superior video quality over the Session’s smaller form factor. Commentary by management at recent investor events confirm that Session has been a difficult sell at the same price point of its historically favorite HERO4 Silver model. Disappointing demand culminated in GoPro announcing its decision to reduce the price to $299 last week, a $100 discount from the $399 price point when the product was launched in July."
A major concern for analysts about GoPro has been whether its cameras can break out of their core user base of geeky early adopters and adventure-sports enthusiasts.
Faucette also wrote that GoPro's recently launched video editing app is not as good as existing software on iOS and Android. And, if the company does not innovate quickly enough, people would continue to use their smartphones for video capture and editing, instead of getting a GoPro camera.
Last month, Barron's forecast that the stock price could plunge further, to $25 a share. The magazine's analysts were concerned about GoPro's ability to beat the competition, as new phones are constantly being released with upgraded cameras.
The stock is off 55% year-to-date, and 70% over the past 12 months.
Here's its lifetime since the IPO in June 2014.
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