Image source: GoPro.

It's time for GoPro (NASDAQ:GPRO) to prove skeptics wrong, justify its recent stock gains, and soothe the market into believing that yet another delay of its Karma drone and a lack of direct availability through (NASDAQ:AMZN) is no big deal. GoPro reports after the market closes on Thursday, and there's a lot riding on the leading wearable-camera maker's third-quarter results. 

Analysts are bracing for a bumpy report -- they see GoPro posting its fourth consecutive quarterly loss on a 21% year-over-year slide in revenue. It's not going to be pretty as we look back, but the key here is the look ahead. GoPro released Hero5 in early October, shortly after the third quarter came to a close. Hero5 and hopefully Karma will be big drivers in propping up sales during the holiday quarter. 

Wall Street sees a return to profitability on a 55% surge in revenue. GoPro's guidance will be the item to watch in Thursday's report, as it will be influenced by the market's initial appetite for the Hero5 camera, sales estimates for the oft-delayed Karma drone, and a feel for when the company will be selling directly through Amazon's online storefront again. 

Storm before the calm

Another thing that could weigh on GoPro's report is the possibility of supply constraints. Longbow's Joe Wittine set a cautious tone in an analyst note last week, as channel checks show tight supply for the Hero5 three weeks after its launch. Delivery of replenishment orders to retailers has been slipping, according to Longbow, and there are rumblings about manufacturer issues after rushing the camera to the market. GoPro will have to set investors at ease, assuring them that there won't be a Hero5 shortage as we head into the critical holiday shopping season. 

That's not the only fire that GoPro will have to put out: It is still not selling its product directly through Amazon. Banking on third-party sellers has led to erratic pricing -- sometimes more than the retail price available elsewhere -- and spotty inventory levels and order fulfillment. GoPro insisted earlier this month that the issue with Amazon would be resolved by early November, so you can be sure that the question will come up early if it's not resolved by Thursday afternoon.

The other major roadblock for GoPro will be the ever-sliding release date for its first consumer drone. Karma was initially supposed to hit the market during the second quarter. The company set an Oct. 23 release date in September, and last week alone we saw that date bumped to Nov. 14 and then again to Nov. 28. Karma risks missing out on holiday buyers willing to splurge on big-ticket gifts.

GoPro stock was starting to stage a comeback heading into this month's release of Hero5. The shares more than doubled between bottoming out in May and peaking earlier this month. The sell-off has been swift since topping out at $17.68 four weeks ago, falling 23% in the process. The bright lights will be hot as they shine on GoPro in a few days. It better come armed with an arsenal of fire extinguishers.  

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.