GoPro's (NASDAQ:GPRO) days of being a market darling now seem like ancient history, but the company still has a highly regarded brand and leadership position in its corner of the camera market -- and the beaten-down stock might attract some attention as a contrarian turnaround play.

After shares hit the market in June 2014 at $24 for the initial public offering and peaked in October 2014 just short of $94, they now trade in the $5.50 range.

GPRO Chart

GPRO data by YCharts.

With shares not far removed from their lifetime pricing low and some rare good news arriving with the camera maker's first-quarter results, it's worth zooming in on GoPro stock again to see whether it might be a good fit for some investors. The company managed to grow revenue 20% year over year last quarter to reach $243 million thanks to demand for its HERO7 Black camera. Overall camera unit sales increased roughly 11%, and the company's net loss narrowed roughly 79% to come in at $10.2 million thanks to reduced operating expenses in conjunction with the sales boost.

With some interesting new products and ongoing efforts to become a more efficient operation, is the long-struggling GoPro an underdog stock worth adding to your portfolio?

A GoPro Fusion camera.

Image source: GoPro Fusion.

Don't count on GoPro's subscription business to be a savior

GoPro's attempt to build a media empire fell apart, and it doesn't appear that the company will revisit that strategy. However, it's still looking to build business outside of the hardware space -- most notably through GoPro Plus. This subscription service is available for $5 per month and now offers benefits like unlimited cloud storage space, a no-questions-asked exchange policy for damaged cameras, and a 50% discount on all accessories through the company's online store.

The company managed to increase subscribers to its GoPro Plus subscription service 10% sequentially in the first quarter and 50% over the last year to reach 220,000 members. However, even if each of those members stays on for the full year, that would still only generate about $13 million in sales annually. Membership growth over the last year has been encouraging, and the company at least has the opportunity to continue expanding its subscription base. But expecting membership for the service to continue on a similar trajectory and building a bull case on that expectation is a shaky proposition.

Without a real media component to flesh out its subscription business, there seems to be little chance that the GoPro Plus subscription service will really take off and provide the company with sustainable sales growth. Furthermore, there are questions about how offering a half-off discount on accessories will affect category performance, particularly when there is little to stop users from signing up for the subscription service, purchasing desired accessories at a steep discount, and then canceling the service after realizing the benefits of the discount. Similar scenarios could play out with the no-questions-asked camera replacement policy. Management has said that it expects revenue from Plus to be high margin, but banking on the service to be a big catalyst for the business seems ill-advised.

GoPro stock is a bet on panoramic cameras

With the standard action camera market facing long-term commodification and cell phone cameras offering a pretty good video-capturing solution for most people, GoPro may not have much room for growth in its traditional video space. That means that new product categories like 360-degree cameras present the company's best avenue to growth.

GoPro is a hardware company, so it's important to think of it as a business that will live and die based on the success of its devices. Right now, the core product category that's important to focus on is 360-degree or panoramic cameras -- devices like the GoPro Fusion that capture a full range of video and have viewing ranges that can be rotated by users during playback. It's possible that the company will be able to ride a wave of interest in panoramic cameras brought on by emerging demand for virtual reality (VR) and augmented reality (AR) content. However, these potentially revolutionary new display formats have been slow to go mainstream, and an increase in demand for 360-degree video content likely hinges on increased demand for often-expensive VR and AR headsets.

Even if 360-degree cameras become the next hot thing, there are reasons to be cautious about GoPro's outlook in the space. The company built a leading brand in the action camera market, but that doesn't necessarily mean that it will score big hits in the 360-degree camera space. The company faces much more competition in this emerging market than it did at the outset of its push into action cameras.

Big players like Alphabet, Facebook, Amazon, and Apple could ready their own 360-degree video solutions as part of pushes into VR and AR. And as with the standard action-camera space, GoPro will have to face off against lower-priced competition from Chinese companies like Xiaomi and Huawei.

GoPro could see upswings, but long-term prospects remain dim

GoPro is now valued at just 0.7 times this year's expected sales. Huge sell-off over the last few years and the possibility that panoramic cameras could provide a big new growth engine make it possible that the stock will see a dramatic rebound. However, the outlook in this crucial product category remains pretty unclear. Investors who aren't willing to take a flier on the company scoring big wins in the uncertain 360-degree camera space should probably avoid the stock.