Source: GoPro.

A year to forget for GoPro (GPRO 5.92%) shareholders continues to get uglier. Shares of the leading maker of wearable action cameras took an 11% hit last week, hitting a fresh all-time low in the process. The stock has now surrendered 72% of its value in 2015. Stretch things out to GoPro's peak late last year, and we're talking about a brutal 82% plunge.

GoPro's stock took a hit last week after key supplier Ambarella (AMBA 0.49%) offered up weak guidance for its holiday quarter. The market also got spooked after one of GoPro's more popular cameras received another drastic price cut. 

Ambarella is the lone provider of GoPro's video processing chips, and it offered up a gloomy outlook for its wearable cameras business on Thursday. Ambarella sees flattish year-over-year overall growth on the top line for its holiday quarter, but it's expecting an actual decline in wearable cameras.

GoPro investors have learned to heed Ambarella's forecasts. It also warned of sluggish wearable camera chips three months ago, and GoPro's own eventual report and stock price took a beating. GoPro is in a funk, and you don't need to realize that it's trading for a fifth of what it was a year ago to make that realization. 

Wearable cameras have been noticeably absent from the lists of hot tech gifts for this holiday shopping season. GoPro's Hero line was the toast of the 2014 shopping season, but this month will belong to hoverboards, smartwatches, and fitness trackers.

GoPro realizes that it needs to try harder. The Hero4 Session, GoPro's smallest camera, was introduced at $399 this summer. That was a stiff price for a compact device that lacked the LCD screen and 4K recording ability of GoPro's similarly priced Hero4 Silver camera. It slashed the price to $299 in September, and on Friday it was shaved to $199.

The press release describing the move billed it as a game changer, but obviously the market views this as a margin changer. You don't roll out two price cuts within the first five months of a product's availability and miraculously shave your cost in half. 

There was always the fear that GoPro would be a one-trick pony. As smartphone cameras get better, there has been the lingering concern that wearable cameras will go the way of MP3 players and digital still cameras. These are devices that thrived until being incorporated into smartphones. 

GoPro also fancied itself as a brand that could eventually spawn its own video-sharing platform, but taking on YouTube and other effectively monetized hubs is a tall order.

This doesn't mean the long-term prognosis is dire for GoPro. The Hero4 Session was ineffectively priced at its launch. The markdowns were inevitable. The next few quarters will be rough for GoPro, but we're now talking about a stock fetching less than 14 times forward earnings estimates. It has time to get it right, and a history of innovation to reward the patient. The past year has been horrific, but the year ahead doesn't have to be.