In the following segment from Motley Fool's Industry Focus: Consumer Goods show, we break down the signs of life emanating from GoPro (NASDAQ:GPRO). Does a narrower, more realistic business focus mean that the action camera company can recover? Our podcast team weighs in.

A full transcript follows the video.

This video was recorded on Sept. 25, 2018.

Vincent Shen: I want to make sure that we can talk a little bit about GoPro, ticker GPRO. Shareholders of this company have had to stomach quite a bit of volatility since the company went public back in 2014. Keep in mind that the stock fell from almost $90 per share, and over $10 billion dollars in market cap shortly after the IPO, to just $6 per share and less than $1 billion currently.

The last two years in particular, CEO Nicholas Woodman has himself acknowledged a lot of missteps in areas like their inventory management, their pricing for their HERO camera lineup, the failure of the Karma drone, which was a pretty big PR disaster for the company. And then, execution during their holiday shopping season, which is really, really critical for GoPro's business.

Revenue last year, down 25% from the company's peak in 2015. More recently, the second quarter earnings report had a much more bullish tone to it than we've seen in some time from management. They had a much clearer product and pricing strategy for the holiday quarter. They're talking about increased units sold this year over 2017. Guidance for really rapidly expanding gross margins, which, combined with a tight lid on expenses, could lead to a positive bottom line in the second half of this year, and then full-year profitability in 2019, which is an important goal for management.

What do you think, Asit? The company's new HERO7 lineup of three cameras launches in the next few days -- internationally, September 27th, and domestically September 30th. Are you feeling as good about the company's prospects now as management seems to be?

Asit Sharma: Maybe I'm not as enthusiastic as management, but I do think that they have an opportunity here if they can execute it in this fourth quarter. One thing you mentioned caught my eye. Gross margin in the last quarter was 29%. If you just came in on an alien spaceship, you'd say, "Wow, that's a really low gross margin for a manufacturer!" But hey, it was 22% in the prior sequential quarter. There's a jump sequentially. One of the things we saw in that report is the comparison of sequential numbers. In other words, saying that, "Hey, our year over year comparisons aren't great. But if you just look at the leap we've made in these last three months ... " They did have some impressive numbers in there.

To your question about the new lineup, I think that they may benefit from something which has been missing before. In the past, the company really wanted to dazzle consumers every time they had a new lineup. They did spend good money on enhancing their product, but the pricing was always an issue. Sometimes they overshot, sometimes they hurt their own margin. What we've seen in this new lineup -- I am no device expert, but what I've been able to grasp is that the new HERO lineup focuses on image stabilization. If you think about Steadicam in the film industry, it uses a technology which the company calls Gimbalike -- gimbal being the type of device which steadies the image. They call it, I think, hyper stabilization. This is actually a lower-cost move for the company vs. having higher-end sensors and better image quality, smoother HD quality, that it could offer. What that does, it'll help them raise the average selling price of their devices. But it's not out-pricing them in the market or giving consumers a product which they may or may not want.

I think that is a savvy move. It's a more realistic move. I think if I had one word to characterize management's approach for this quarter, and maybe moving forward, it's realistic. What are your thoughts?

Shen: I think that's a good one-word summary of their approach to things now. At a conference earlier this month, let me pull up the quote. Woodman talked about, quote, "A maturing of our approach to the business with a better understanding of who our customer is, understanding customer segmentation of our market, understanding pricing sensitivity, and understanding customer desire to see annual product refreshes from us."

They see to have a better grasp now of some of the mistakes they've made previously. They really hammered on this clear strategy that they have for this upcoming holiday season. They realized their strength, their area of expertise, lies not in drones, not in this content or multimedia platform that never materialized. Where they still have the strongest position, they dominate most of the action camera market. Originally, it was with high-end devices. Now, they're making sure that they can serve the needs of customers at lower price points, as well. They have this $199, $299, $399 pricing model for the three new cameras in this 2018 lineup. That introductory-level camera was something they said that was missing last year. Management said that was a major driver of their shortfall, in terms of results, in the last holiday season.

This is really a beaten-down stock. They're trading at less than 1X sales. It definitely seems at face value like an attractive opportunity, if you believe in the ongoing recovery. I'll be watching the fourth quarter results pretty closely to see if some of the bullish demand materializes, and also the solid execution that they're promising materializes.

Any final thoughts from you, Asit?

Sharma: Sure. One last thought is a note of caution if you're thinking of jumping in now. There is this outlier. The company has strong demand for its products in the fourth quarter, but it's having, as other manufacturers are, some component supply issues. With its resistors and capacitors, it has a major contract manufacturer, Jabil Circuit. Its ability to meet total demand may be crimped for the next few quarters. Quarter four is right before. It's that important holiday season. That's a little caveat.

One more I'll add is that historically, the company has botched its fourth quarter, that all-important holiday season. I don't think that'll be the case, honestly, this quarter. I think, from everything Vince just said, I totally agree with that, I think they have some clarity. But this external factor also may hit them.

But definitely a stock now that, for the first time in a long time I've felt, "OK, this could be a value investment." Up until now, I really haven't had that sense. But I do like management's idea that "Hey, we could be this great manufacturer of devices. We own the market. We have huge market share. Why don't we just make our products better, more affordable, and with features people want?" That is a recipe for success. So, me too, I'm going to watch this fourth quarter very carefully.

Asit Sharma has no position in any of the stocks mentioned. Vincent Shen has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends GoPro. The Motley Fool has a disclosure policy.