After the close of trading on Wednesday, March 15, GoPro (Nasdaq: GPRO) surprised the market when it released its Q1 earnings results. The sport-camera maker hit its revenue target and earnings were on par with expectations, but really got the market excited was its announced plan to layoff 270 workers, and other cost cutting measures which would add a projected $200M to the company's bottom line. The updated forecast hit the high end of its previous guidance, and also said it would recovery profitability by the end of the year.

This was welcome news for a company whose stock has been in a steady downtrend for the better part of two years now. After hitting alltime highs in the mid-60s back in August of 2015, shares have been languishing under $10 per share since early November last year.

Is the drought over for now? investors certainly welcomed the news at Wednesday's earnings report, bidding shares up 10% in the after-market, and 14.3% during Thursday's trading. This enthusiasm may be short-lived, however. Despite the company's lofty goal of reaching profitability for 2017, the analysts consensus remains negative. Though it was raised slightly after the call, analysts still believe the company will be losing -0.69 per share this year, and -0.23 in 2018.

A key to the company's claims to legitimacy here is how efficient it can become with the loss of 270 employees. This makes for a total loss of 470 positions over the past three months (15% of its total workforce). Will those remaining on board be increasing their workload? How will this affect productivity? What skills are being sacrified and how will they be compensated for? These are quesitons which remain to be answered.

On a different note, while GoPro remains the key player in the wearable camera market, it still has not yet found a way to compete with the far more ubiquitous iPhone and smart phone product lines. Its new line of drone cams may spur sales, but many are finding that strapping an iphone to a drone works just as well. Phones have far more functionality, and take great pics and vids, so why should consumers tote both a camera and a phone?

If GoPro can turn things around and achieve its projected levels of profitability, we should see shares trading at much higher levels than today's pop. But until they find a way to compete with phones, that scenario seems unlikely.