Fitbit Inc (NYSE:FIT) Staggers after Analyst Downgrade

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In a shock development, analysts at Pacific Crest downgraded the stock from Sector Weight to Underweight citing weak initial sales of FIT’s Charge 2 fitness tracker, its key holiday product.

Shares in Fitbit Inc (NYSE:FIT) ended with a loss of 11.26% on volume of 24.41 million shares.

Fitbit Inc (NYSE:FIT)’s slide penetrates a host of supports

The stock was out of the gates yesterday with a solid downside gap and kept up its downward momentum.

The fall took the price down past the 20, 50 and 200 day SMAs as well as the lower support line of the upward channel which started on June 30.

A penetration of the confluence of so many supports indicates the potential for further bearish action.

Apple Inc. (NASDAQ:AAPL) and Aetna Inc (NYSE:AET) may eat Fitbit Inc (NYSE:FIT)’s lunch

In another adverse development for Fitbit, Aetna will make Apple Watch available to certain large employers and individual customers during open enrolment season, and Aetna will be the first major healthcare company to subsidise a significant portion of the cost of the Apple Watch. This is a fallout from the perception that the Apple Watch has helped people live healthier lifestyles, and therefore to reduce Aetna’s costs.

Additionally, Aetna will make the Apple watch available to its 50,000 employees free of cost, a gesture showing it cared for their health.

This could be the forerunner to many more such corporate deals.

Fitbit Inc (NYSE: is FIT) inventory piling up

According to Pacific Crest analyst Brad Erickson, checks revealed that the Charge 2 fitness product was suffering “meaningful inventory accumulation” and that uptake rates were lower than those of the Blaze and Alta products earlier during the year.

The analyst also raised concerns that many Fitbit owners in fact discontinued use of the devices after a few months, putting a question mark on the company’s long-term growth prospects.

The analyst also said the stock price could fall as low as $11 per share.

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