When GoPro (GPRO 3.36%) announced solid core growth and an adjusted profit in the second quarter of 2019, investors reacted as if the business has never been in worse shape. The stock is trading near an all-time low and shareholders don't seem to be impressed at all with management raising its full-year outlook. 

There are a number of reasons GoPro's stock dropped, but the biggest two were second-quarter results falling short of expectations and uncertainty around new products. Management is bullish that the back half of the year will be big -- and maybe investors should be, too. 

GoPro's camera lineup.

Image source: GoPro.

Excitement over an unknown

GoPro increased revenue growth guidance by 200 basis points during its earnings conference call to a range of 9% to 12%. That should be a very bullish sign for the stock, but some investors may be hesitant to buy into this improved outlook.

CFO Brian McGee said:

Our business outlook is improving from the previous quarter. Product sell-through was strong in Q2 and it continues to be on track in July. We are further encouraged on the second-half outlook given positive feedback from both channel and retail partners on our fall product lineups, and we expect our mix of cameras to remain skewed to the high end. 

Channel and retail partners giving "positive feedback" isn't a tangible reason to expect a great holiday season, so there's understandably some hesitation to take management at its word. 

Management also said that channel inventory was good ahead of the next-generation product launch, but the balance sheet says something different, and that may be giving investors pause. Inventory is up versus a year ago, and that may be a problem if product doesn't sell as well as hoped. 

GPRO Inventories (Quarterly) Chart

GPRO Inventories (Quarterly) data by YCharts.

One thing that may be happening is a bigger build of inventory ahead of the holidays. Last year, GoPro missed out on some sales because inventory was low, so it may be expecting more sales and therefore building more inventory. 

What investors don't know is why retailers would be excited about GoPro's new products. They haven't been released, and considering the incremental improvements annually for the past few years, it's hard to see big changes coming. And that may limit growth long-term. 

360 cameras aren't moving the needle

Outside of traditional cameras, GoPro doesn't have a lot of growth opportunities, and that's a challenge given the company is still losing money today. GoPro continues to command a strong market share in 360 video with Fusion, but that doesn't mean it'll be the next action camera product. Cameras that can capture 360 video are still a small portion of the market overall -- so small that GoPro doesn't even disclose the units or revenue from Fusion sales. 

Ricoh, Insta360, and Xiaomi are just a few of the competitors that GoPro is up against in 360 video, and they all arguably make products and software superior to GoPro's. They may not have the same brand recognition, but they're building innovative products that the market likes. 

With very few options to grow outside of the core action camera business now that drones have flopped and 360 cameras have disappointed, investors need to see a new product to excite consumers. Right now, that product doesn't seem to exist. 

Why be bullish on GoPro stock? 

Opinions of GoPro's shares today really come down to whether you want this to be a growth stock or a value stock. The company is slowly returning to breakeven and expects to report an adjusted profit of about $0.40 per share, which has the stock trading at just over 10 times this year's adjusted earnings. That's a great value for a consumer goods company if GoPro can maintain profitability. 

If you're looking for this to be a growth stock, then results are probably a little more disappointing. There aren't many new markets to enter for GoPro and we don't even know what the holiday cameras will look like yet. 

GoPro has a lot of questions to answer, but if investors look at this as a value stock, there's a lot to like. Second-quarter earnings look a lot better through that kind of lens.