Nearly three years after hitting its all-time high, GoPro Inc (NASDAQ:GPRO) is still facing plenty of risks in 2017. In the last two years alone, the company has bungled a product launch (Karma), had a confusing product lineup (Hero 4), or missed holiday sales because of production delays (Hero 5). 

But amid the stock's drop of over 90% from its highs, GoPro remains a strong brand in the camera and action sports world. Here's why the best is yet to come for this stock. 

GoPro's Hero 5 product lineup.

Image source: GoPro.

Learning from mistakes of the past

GoPro's two biggest problems in the last two years were overbuilding inventory and building products people didn't want. The inventory issue surfaced in 2015 when the company built more Hero cameras than the market demanded, which forced GoPro to discount products and write down inventory. Last year, it learned to build less inventory, even if it meant foregoing some demand. 

In 2016, the company launched the Karma drone before it had been fully tested, resulting in recalls and a delay in the full product launch. And the Hero camera, which was also the camera with Karma, still doesn't make offloading, editing, or uploading videos to social media or other sites easier than a smartphone. These errors need to be fixed for future product launches, but GoPro has a new sense of urgency. 

GoPro has learned from past product launches

The Fusion 360 camera has already been placed into beta testing, showing GoPro has learned a lesson from the Karma launch. If it can iron out any kinks and launch a product that's immediately ready to take the top spot in the 360 degree camera market, the Fusion could be a hit on the scale of what Hero cameras were, defining an entire niche of the market. After Karma's debacle, it looks like GoPro may get the Fusion launch right. 

We should also expect a Hero 6 product that takes a step forward in ease of use. Hero 5 came with the option to automatically upload content to the cloud via GoPro Plus and voice activation. The next generation should include improvements in both products and an easier way to automatically upload content to social-media partners. That could be a game changer for Hero action cameras.

After two years of mistakes in launching new products, GoPro should have learned how to beta test products before launch and build what customers really desire in easy uploading, editing, and sharing of content. If it hasn't, there's little hope for a recovery in the stock long term. 

Why GoPro could have its best year yet

The reason the best could be ahead for GoPro comes down to the pessimism already priced into the stock. GoPro's market cap is just $1.2 billion, about the same as the revenue generated in the past year. If new products can excite investors or create a new market, as the Fusion hopes to do, and GoPro can execute on margin expansion plans, the stock has a lot of upside. 

Action cameras and 360 cameras are one market that hasn't yet been taken over by the big players in tech, leaving an opening for GoPro to get its strategy right. And management may finally be ready to execute on the opportunities they identified as ways to grow the business a long time ago.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.