Fitbit Is…Another Blue Apron / Snapchat
Shares of Fitbit (NYSE: FIT) was down 13% after they announced their fourth-quarter results this past week. While the company beat analyst estimates for both revenue and earnings, it issued disappointing guidance.
Wedbush analyst Michael Pachter wrote that the company’s “guidance for continued earnings losses is somewhat disappointing.”
Morgan Stanley analyst Yuuji Anderson reiterated his downbeat view of Fitbit’s prospects, writing that the company’s legacy device business “continues to overshadow new opportunities.” He’s concerned that “difficult demand trends in consumer wearables” will lead to an acceleration in cash burn and hurt Fitbit’s ability to generate earnings power.
Fitbit was the pioneer in fitness trackers and was doing well, that until the smartwatches were also able to track fitness activities. And at the point this was the beginning of the end for Fitbit. Investors took notice has the stock price has declined double-digit in percentage, each of the past three years.
Just like Snapchat has to contend with Facebook.
and just like Blue Apron has to contend with Amazon,
Fitbit has to contend with the Apple Watch.
And based on the trajectory of all three situations, there is no fairy tale ending, look for Fitbit to continue to decline, the next stop is the weekly demand at $4.50.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.