GoPro's Meme-Stock Surge and Short-Squeeze Potential in 2025: A Convergence of Retail Momentum and Undervaluation

In the summer of 2025, GoPro (GPRO) became a lightning rod for speculative fervor. A stock that had languished in obscurity for years suddenly saw its price skyrocket by over 60% in two trading days, driven not by earnings reports or product launches, but by the viral energy of retail investors. This surge, reminiscent of the 2021 meme-stock phenomenon, raises a critical question: Is GoPro a fleeting retail-driven parlor trick, or does its combination of high short interest, undervaluation, and retail momentum offer a legitimate short-term trading opportunity?

The Anatomy of a Meme-Stock Surge

GoPro's recent price action is a textbook case of meme-stock dynamics. By July 2025, the stock had a short interest of 9.51% of its float, with a short interest ratio of 2.13 days. This means short sellers could theoretically cover their positions in under three trading days—a recipe for volatility. The catalyst? Retail traders on Reddit's r/WallStreetBets and Stocktwits began rallying around GPRO, drawn to its low price ($1.50–$3.00), high short interest, and the allure of a potential short squeeze.

The surge began on July 22, 2025, when shares jumped 41% in a single day, followed by a near doubling in pre-market trading on July 23. By midday, the stock had settled at $1.86, a 35.7% gain for the day. This momentum was amplified by the self-reinforcing nature of short squeezes: as retail buyers pushed the price higher, short sellers scrambled to cover, further fueling the rally.

The Valuation Paradox: Cheap, but Is It a Bargain?

GoPro's fundamentals are a mixed bag. The company has posted declining revenue since 2022 and has yet to achieve consistent profitability. Its trailing twelve months (TTM) revenue per share is $5.06, translating to a P/S ratio of 0.31—well below the US Consumer Durables industry average of 0.6x and the Hardware sector median of 1.56. This suggests GoPro is trading at a steep discount relative to its peers.

However, the company's unprofitability complicates traditional valuation metrics. Its EV/EBITDA ratio is negative (-2.44), reflecting a loss-making business. Revenue per share has declined by an average of 6% annually over five years, and analysts project a 5.7% contraction in 2025. These trends raise the question: Is the low P/S ratio a sign of undervaluation, or a warning of structural challenges?

The Retail Momentum Catalyst

The key to GoPro's surge lies in the interplay between speculative retail demand and the mechanics of short selling. A stock with a high short interest and a low price becomes a magnet for meme-stock activity because it allows small investors to deploy capital with minimal risk while amplifying the pressure on short sellers.

GoPro's beta of 1.9—a measure of its volatility relative to the S&P 500—further exacerbates this dynamic. In a risk-on market environment, where investors are chasing high-conviction, low-cap bets, GPRO's combination of low cost, high leverage, and retail-friendly narrative creates a perfect storm. The stock's 180 million average daily trading volume during the July surge also highlights the depth of retail participation.

Short-Squeeze Potential: A Double-Edged Sword

A short squeeze occurs when a rising stock price forces short sellers to buy shares to limit losses, accelerating the upward trend. GoPro's 9.5% short interest means that a sustained price increase could trigger a self-reinforcing cycle. However, this scenario is not guaranteed. Short sellers may choose to let their positions run rather than cover at a loss, especially in a highly volatile stock.

The risk for traders lies in the fickle nature of retail momentum. Meme stocks often experience sharp reversals when sentiment shifts. For example, GoPro's price pulled back from its $2.69 peak to $1.86 within hours, illustrating the fragility of the rally. Traders must weigh the potential for a short squeeze against the likelihood of a sudden reversal.

Strategic Considerations for Short-Term Traders

For those considering a short-term trade in GoPro, the following factors merit attention:

1. Entry Points and Stop-Loss Discipline: Given the stock's volatility, traders should define clear entry and exit points. A breakout above $2.00 could signal renewed retail momentum, while a drop below $1.50 may indicate waning enthusiasm.
2. Short Interest Updates: Monitor short interest reports for signs of short-covering pressure. A rising short interest ratio (e.g., moving from 2.13 to 3.0 days) could signal institutional participation or a tightening squeeze.
3. Retail Sentiment Indicators: Track social media activity and forum sentiment to gauge the health of the meme narrative. Sudden declines in chatter may precede a price correction.

The Bottom Line: A High-Risk, High-Reward Proposition

GoPro's July 2025 surge is a compelling case study in the intersection of retail sentiment, short interest, and valuation. While the stock's low P/S ratio and high short interest create a favorable setup for a short-term trade, its weak fundamentals and volatility demand caution. For disciplined traders with a high risk tolerance, GPRO offers a speculative opportunity—but only if positioned as a short-term play with strict risk management.

In the end, GoPro's story is less about the company itself and more about the market's willingness to trade narratives. Whether it becomes the next GameStop or fades into obscurity depends not on its cameras, but on the collective imagination of its shareholders.