GoPro (NASDAQ:GPRO) shares had made big swings in the last two years. The stock initially started trading on NASDAQ in the beginning of 2015 with the share price of just over $30. The GPRO stock gained significant momentum in the first two months and hit the highest level at $86 a share. However, the shares lost their shine and dipped sharply in the next two years. The stock is currently trading close to $7.50 per share, the lowest level in the last 52-weeks.

Its stock declined 27% in the last three months due to lower than expected earnings growth guidance for the final quarter of 2017. However, some investors believe that the dip in GoPro shares offers a buying opportunity.  

GPRO stock appears undervalued, trading around 3.2 times to earnings and 0.8 times to sales, lower from the industry average of 5.2 and 2.8 times, respectively. The company’s forward prices to earnings ratio of 17 also suggest steady upside in the coming days.

Although its financial guidance marginally missed analysts expectations, its financial numbers are growing at a solid pace to offer a support to the share price. In the latest quarter, GoPro generated sales growth of 37% to $330 million, compared to revenue of $240 million in the prior year period. Moreover, the company has also impressed with its margin improvement initiatives, including improving efficiencies, reducing costs and investing in high margin products.

Consequently, the company posted adjusted EBITDA of $36 million, a growth of $109 million on a year-over-year basis. GoPro is in a solid position to invest in growth opportunities considering the improvement in its cash flows. In the latest quarter, it generated operating cash flow of $56 million, when its capital investment was standing around $8 million. Thus, the company was left with a massive free cash flow of $47 million to invest in growth opportunities.

Overall, the dip in GPRO shares was only due to investors overreaction to its future guidance, which was adjusted marginally. Therefore, buying GPRO shares after the massive selloff looks like a good investment strategy for growth investors.   

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