Investors who jumped in on GoPro (NASDAQ:GPRO) stock after its initial public offering last year have been rewarded handsomely. Shares are up nearly 50%. Sure, it's been a volatile ride; today, shares are trading more than $35 below an all-time high of $98.50 achieved toward the end of 2014. But buying and holding this fast-growing stock has proved lucrative despite its wild swings. Going forward, however, is this growth stock still worth holding at these levels?

Here are three reasons not to sell GoPro stock.

Gopro Cameras

GoPro cameras. Image source: GoPro.

Revenue is soaring
When it comes to growing its top line, GoPro hasn't missed a beat since it went public. Year-over-year revenue growth for GoPro's previous four quarters has ranged between 38% and 72%. Furthermore, its growth isn't showing any sign of a slowdown; its two most recent quarters' year-over-year growth was actually higher than the preceding two quarters.

Going forward, GoPro is forecasting more growth in Q3. The company expects third-quarter revenue to soar from $280 million in the year-ago quarter to somewhere in the range of $430 million to $445 million, which represents 56% growth when the forecasted midpoint is used. 

GoPro is already highly profitable
Combining GoPro's pricing power and excellent execution when it comes to managing operating costs in a growth environment, the company benefits from heady margins. Its gross profit margin is usually well over 40% and its operating margin for the past four years has remained above 10%, even as operating costs soar about 50% annually.

GoPro's profitability amid such significant growth is an impressive feat few fast-growing tech companies can match. Not only is it a sign of excellent leadership, but it also bodes well for the company's position as the leader in the action camera market.

Gopro Camera Snowboarder

Snowboarder using a GoPro camera. Image source: GoPro.

Viral marketing is built in
While GoPro's sales and marketing expenses were up 44% in Q3 from the year-ago quarter, make no mistake: The company isn't dependent on fast-growing marketing spend to move product. Indeed, GoPro's free marketing, while difficult to measure, is almost certainly growing faster than its sales and marketing spend.

GoPro's products are inherently viral. To illustrate, consider some of these excerpts from GoPro's third-quarter earnings release.

  • "The Share the Stoke campaign encouraged GoPro's community of 130 sponsored athletes to post their HERO4 content; in just 25 days, athletes such as Kelly Slater and Julia Mancuso posted more than 3,000 photos and videos, reaching more than 50 million fans and generating close to eight million interactions."
  • "GoPro content published on YouTube in Q3 was up 92% year over year; views on GoPro's YouTube channel were up 99%; video minutes watched on GoPro's YouTube channel were up more than 133% year over year."

At this stage in GoPro's growth, it's likely that every dollar spent on sales and marketing is leveraged by a subsequent outsized increase in shared videos, which fortify the intangible value of GoPro's brand and spark greater interest in the company's products.

Sure, GoPro stock doesn't look cheap today. But selling the stock based on a forward-looking valuation makes little sense when the underlying business truly looks poised for plenty more significant growth in the years ahead.

Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends and owns shares of GoPro. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.