We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Fitbit Rating Downgraded by Morgan Stanley, Shares Fall 9.4%
Read MoreHide Full Article
Fitbit, Inc. has reportedly been downgraded by Morgan Stanley analyst Yuuji Anderson. The analyst downgraded Fitbit’s stock from equal-weight to underweight. Also, he lowered the target price by 20% to $4 on the stock, prompting a massive decline of 9.41% in its share price
The company’s growth has been hampered by increasing competition in the fitness wearable category, lack of upgrades among existing users and lackluster growth in the Asia Pacific region.
The impact of these headwinds has been significant on the stock.
Notably, the company’s shares have lost a mammoth 85% since Jun 18, 2015, the day it started trading on the New York stock exchange at $30.40. Also, the stock has underperformed the industry on a year-to-date basis. While its industry has gained 18.4%, the stock has lost 19.1%.
Why the Downgrade?
This activity tracker and fitness device maker has introduced a number of new products in the recent past. Just last month, the company launched a modern fitness tracking device — Fitbit Versa, which is more akin to Apple Watch 3 and Samsung Gear Sport. It is a light metal smartwatch that provides a personalized dashboard to users with many other fitness and smartphone features.
However, Yuuji Anderson believes that the new device isn’t much capable to offset the decline in Fitbit’s sales. He believes that though the company is making efforts to diversify its product portfolio, yet these products are unable to drive enough revenues for the company. Coming to the company’s sales figures, Fitbit sold only 15.3 million devices in 2017, a decrease of 32% from 22.3 million sold in 2016.
The analyst believes that one of the main reasons for weak sales was the increasing competition, especially from Apple (AAPL - Free Report) . The company faced a stiff competitive pressure from Apple’s Apple Watch that is a smartwatch combined with fitness tracking feature.
Not only Apple, there are other big manufacturers too who are developing connected devices on Alphabet-owned Google's Android operating system.
Yuuji Anderson wrote, "We see more downside to the stock as revenues struggle to stabilize and cash burn resumes." In addition, "We think new smartwatches will be outweighed by declines in legacy products, while software opportunities in health coaching will take time to ramp."
Conclusion
Fitbit, which became a prominent name for its simple fitness wearables, has been hurt by massive competition in the market.
It faces competition in both the high and low-end product range. On the high-end front, it competes with Apple Watch. Although Fitbit expected Ionic to help the company take on Apple, it is hardly an easy task to compete with one of the biggest companies in the world. Also, many big manufacturers are developing connected devices on Google's Android operating system.
On the lower end, fitness-tracking devices from Jawbone, Garmin Ltd. (GRMN - Free Report) and Xiaomi also pose tough competition.
Even the launch of its flasgship Ionic and addition of innovative features have not helped it stay ahead of its competitors. However, we need to wait for a while and see if Fitbit’s new products can help it gain any meaningfully share from the rising opportunities in the health care business.
Long-term earnings per share growth rate for Stamps.com is projected to be 15%.
Can Hackers Put Money INTO Your Portfolio?
Earlier this year, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Image: Bigstock
Fitbit Rating Downgraded by Morgan Stanley, Shares Fall 9.4%
Fitbit, Inc. has reportedly been downgraded by Morgan Stanley analyst Yuuji Anderson. The analyst downgraded Fitbit’s stock from equal-weight to underweight. Also, he lowered the target price by 20% to $4 on the stock, prompting a massive decline of 9.41% in its share price
The company’s growth has been hampered by increasing competition in the fitness wearable category, lack of upgrades among existing users and lackluster growth in the Asia Pacific region.
The impact of these headwinds has been significant on the stock.
Notably, the company’s shares have lost a mammoth 85% since Jun 18, 2015, the day it started trading on the New York stock exchange at $30.40. Also, the stock has underperformed the industry on a year-to-date basis. While its industry has gained 18.4%, the stock has lost 19.1%.
Why the Downgrade?
This activity tracker and fitness device maker has introduced a number of new products in the recent past. Just last month, the company launched a modern fitness tracking device — Fitbit Versa, which is more akin to Apple Watch 3 and Samsung Gear Sport. It is a light metal smartwatch that provides a personalized dashboard to users with many other fitness and smartphone features.
However, Yuuji Anderson believes that the new device isn’t much capable to offset the decline in Fitbit’s sales. He believes that though the company is making efforts to diversify its product portfolio, yet these products are unable to drive enough revenues for the company. Coming to the company’s sales figures, Fitbit sold only 15.3 million devices in 2017, a decrease of 32% from 22.3 million sold in 2016.
The analyst believes that one of the main reasons for weak sales was the increasing competition, especially from Apple (AAPL - Free Report) . The company faced a stiff competitive pressure from Apple’s Apple Watch that is a smartwatch combined with fitness tracking feature.
Not only Apple, there are other big manufacturers too who are developing connected devices on Alphabet-owned Google's Android operating system.
Yuuji Anderson wrote, "We see more downside to the stock as revenues struggle to stabilize and cash burn resumes." In addition, "We think new smartwatches will be outweighed by declines in legacy products, while software opportunities in health coaching will take time to ramp."
Conclusion
Fitbit, which became a prominent name for its simple fitness wearables, has been hurt by massive competition in the market.
It faces competition in both the high and low-end product range. On the high-end front, it competes with Apple Watch. Although Fitbit expected Ionic to help the company take on Apple, it is hardly an easy task to compete with one of the biggest companies in the world. Also, many big manufacturers are developing connected devices on Google's Android operating system.
On the lower end, fitness-tracking devices from Jawbone, Garmin Ltd. (GRMN - Free Report) and Xiaomi also pose tough competition.
Even the launch of its flasgship Ionic and addition of innovative features have not helped it stay ahead of its competitors. However, we need to wait for a while and see if Fitbit’s new products can help it gain any meaningfully share from the rising opportunities in the health care business.
Fitbit, Inc. Price and Consensus
Fitbit, Inc. Price and Consensus | Fitbit, Inc. Quote
Fitbit has a Zacks Rank #3 (Hold). A better-ranked stock in the technology sector is Stamps.com Inc. , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings per share growth rate for Stamps.com is projected to be 15%.
Can Hackers Put Money INTO Your Portfolio?
Earlier this year, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>