Consumer hardware is riddled with examples of innovative products that quickly turned to commodities, a risk that often rears its head in discussions of emerging consumer-electronics brands FitBit (NYSE:FIT) and GoPro (NASDAQ:GPRO).

Although more owing to negative earnings of late, the fact isn't lost on tech investors today.

GPRO data by YCharts

However, these two next-gen consumer-electronics growth stories share far more in common than just their risk factors, which makes them perfect comparisons as we head into a holiday season in which both companies have plenty at stake. Which is the better stock buy between GoPro and FitBit? Let's take a look.


Source: Wikimedia Commons.

Bull thesis: GoPro
To say October was a rough month for GoPro would be an extreme understatement. The company's shares were badly battered late in the month, when third-quarter earnings severely missed estimates, seemingly confirming many of the most assiduous doubts facing the action-camera maker. Nevertheless, let's review the rationale for owning GoPro.

Although facing mounting competition, GoPro remains the undisputed market-share leader in action cameras. And although its lack of a new marquee product for the holiday season has concerned investors, GoPro's 2016 product pipeline features a number of new categories that could help rejuvenate its growth prospects, including a consumer drone, a virtual-reality camera rig, and an updated flagship Hero 5 device.

There's also a case to be made, given its stock's current plight, that GoPro's shares hold some value, depending on your view of its trajectory. The company currently trades at 13.2 times its next 12 months' earnings per share estimate. However, it bears reiterating that GoPro's valuation speaks to its alarming loss of business momentum, and anyone considering it should watch how the critical holiday quarter plays out.


Source: FitBit.

Bull thesis: FitBit
Much like GoPro, fitness-tracker company FitBit suffered from a sizable, albeit slightly less traumatic, post-earnings sell-off when it reported its earnings recently.

Overall, FitBit's third-quarter performance generally exceeded expectations. The company beat analysts' estimates on both the top and bottom lines. However, the company also announced its plans for a follow-on equity offering to sell between 7 million and 14 million new shares of stock. With slightly more than 206 million non-diluted shares as of its most recent report, the offering could raise well over $500 million to help expand FitBit's dominance of the rapidly expanding fitness-tracker market.

FitBit is still expected to grow sales at 33% next year, and the company appears to be on the path to consistent profitability. Perhaps more important, it appears that competitive pressures, namely from smartwatches such as the Apple Watch, haven't scuttled FitBit's growth story as many had envisioned. That could change with each new smartwatch product cycle, so the threat has by no means fully abated. However, with it claiming to control as much as 85% of the fitness-tracker marketplace and the company executing well on its core strategy, FitBit looks like a company quickly establishing a profitable niche in an important, high-growth consumer-electronics market.

Winner: FitBit
In light of their mutual earnings-fueled sell-offs, the comparisons between FitBit and GoPro are perhaps more apropos than ever. However, in considering the crucial differences between the two, FitBit emerges to me as the clear favorite.

Whereas GoPro is facing mounting pressure on both ends of the pricing spectrum, FitBit appears to be consolidating its grip over its core marketplace, and that's largely the basis for opting for FitBit over GoPro.

To be clear, investing in either of these nascent companies involves its share of risk, a point that should be obvious in light of their mutual sell-offs. Other than specialized areas that involve using huge amounts of intellectual property, consumer electronics companies that focus largely on hardware tend to trend toward commoditization. So while I think only a few key differences exist, FitBit seems like the more attractive option among two relatively risky growth stocks.

Andrew Tonner owns shares of AAPL. The Motley Fool owns shares of and recommends AAPL and GPRO. 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.