(Reuters) - Shares of GoPro Inc fell again on Tuesday after analysts warned that its products face increasing market saturation, a day after the action-camera maker said it was open to a sale but was not actively pursuing one.
Shares of the company were down nearly 5 percent at $6.25 in premarket trading, but a far cry from the heavy losses suffered on Monday when it announced plans to exit the drone business, cut jobs and lower its fourth quarter revenue estimate.
After that announcement, the stock crashed 33 percent to a record low of $5.04.
GoPro is battling waning demand for its sports cameras and drones.
"The increasing power and presence of smartphones have negatively impacted sales of GoPro's products, with its pace of innovation unable to offset creeping market saturation," Wedbush Securities analyst Alicia Reese wrote in a note.
The global demand for GoPro's products cannot get higher than what it already is and the San Mateo-based company should acknowledge the reality, Dougherty & Co analyst Charles Anderson said in a note.
Wedbush cut the price target on the stock to $6 from $10.50 and Dougherty & Co's Charles Anderson, who has a 4-star rating, trimmed the price target by $3 to $4. GoPro has a median price target of $8.50.
"It isn't clear that they have much of a strategy beyond selling more HERO cameras. I'm not sure investors will warm up to the story until they demonstrate some traction with sales growth," Wedbush Securities analyst Michael Pachter said.
GoPro's shares closed down 13 percent on Monday, paring the earlier losses after reports that it had hired J.P. Morgan to help it with a sale process. [nL4N1P33YA]