Shares of GoPro (NASDAQ:GPRO) moved higher on Tuesday after it introduced a new line of action cameras. The $399 HERO 8 Black will be 14% lighter than its predecessor, and the $499 HERO Max will raise the stakes by combining a single-lens HERO with a dual-lens 360 camera. The former is evolutionary. The latter is revolutionary. Will it be enough to turn GoPro into a market darling again?

Investors' initial excitement didn't last, something that we also saw with the debut of HERO 7 around the same time last year. This time around GoPro would go on to shed most of its intraday gains before the closing bell on Tuesday, and it continues to trade well below the 52-week highs it hit back in May. Things can change if either of the two cameras -- more than likely HERO Max -- is a hit over the critical holiday shopping season. A strong showing could easily find GoPro reclaiming its springtime highs, but with the stock still trading nearly 95% below its all-time high of $98.47, don't wait up for it to take out its record high-water mark. Let's go over the reasons for why GoPro will probably never score another all-time high.

Hand holding out HERO 7 on a raised dock over the ocean with several cabanas in the background

Image source: GoPro.

1. Business isn't where it used to be

After three years of declining revenue, GoPro is on pace to deliver its first year of top-line growth since 2015. Obviously, it's great to see sales finally start to move up, but the company has a long way to go before it claws its way out. Revenue has risen 4% over the past four quarters, but we're still 26% below GoPro's top-line results from 2015. 

It doesn't get prettier on the bottom line. GoPro's profitability peaked in 2014, and it's been posting losses over the past three years. The company is finally starting to turn the corner, but there's no reason to think that it may ever return to the margins and profit levels it was achieving when it went public more than five years ago.

2. The marketplace has changed

There was a time when GoPro cameras were the cool gadgets. Every extreme sports enthusiast had one strapped on as they skateboarded or mountain biked. Kids were topping their Christmas lists with GoPro as their big-ticket gift of choice. It was one of the hottest brands among consumer discretionary stocks at the time of its 2014 IPO. A couple of things happened to undermine the brand's dominance.

From the ranks of its own niche, other action cameras began popping up at significantly lower price points. Suddenly GoPro's pricing elasticity became rigid. The bigger problem for GoPro was the mobile migration.  Smartphone makers soon realized that the camera was more than just an afterthought. With every passing year we saw mobile phone camera specs improve. The smartphones themselves also became more durable, making it easier to replace the basic functionality of a wearable action camera. 

3. Valuation expectations have changed

Wall Street typically holds back on the revenue and earnings multiples that it doles out for hardware companies, but GoPro didn't hit the market as just a camera maker. GoPro had dreams of becoming a full-blown media company, figuring that it could be the viral video hub and cloud-based editing space for its most active users. That never panned out.

Even within the hardware market, GoPro's once-applauded dream to be a major player in the aerial/drone market also crashed and burned. The company is back to being just a maker of high-end action cameras. It's always been GoPro's bread-and-butter business, and now the valuation multiples have been rightfully pared back to reflect its potential. Anything can change in the future, but for now, GoPro's ceiling isn't as high as the blue skies it once promised.

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.