What happened
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Shares of Fitbit (NYSE: FIT) fell 10.8% in April, according to data from S&P Global Market Intelligence. Momentum for rivals in the wearables space appears to have prompted investors to move out of the stock.” data-reactid=”12″>Shares of Fitbit (NYSE: FIT) fell 10.8% in April, according to data from S&P Global Market Intelligence. Momentum for rivals in the wearables space appears to have prompted investors to move out of the stock.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Data source: FIT YCharts.” data-reactid=”26″>Data source: FIT YCharts.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Sales tracking has suggested strong momentum for Apple‘s wearables, and the company was eager to tout the category’s performance at the end of April with an announcement that its wearables had set a new second-quarter sales record at roughly $5.1 billion. ” data-reactid=”27″>Sales tracking has suggested strong momentum for Apple‘s wearables, and the company was eager to tout the category’s performance at the end of April with an announcement that its wearables had set a new second-quarter sales record at roughly $5.1 billion.
Image source: Fitbit.
So what
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Fitbit released four new health and fitness trackers in March, but there wasn't much news for the company in April outside of plans to offer Snap‘s Bitmoji cartoons as an active watchface for Fitbit smartwatches that can provide adaptive updates throughout the day depending on context and user behavior. Without any big developments to buoy the business outlook or stock, and investors and analysts fixating on momentum for the Apple Watch, Fitbit shares started last month with a shrug and ended with a slouch. ” data-reactid=”41″>Fitbit released four new health and fitness trackers in March, but there wasn’t much news for the company in April outside of plans to offer Snap‘s Bitmoji cartoons as an active watchface for Fitbit smartwatches that can provide adaptive updates throughout the day depending on context and user behavior. Without any big developments to buoy the business outlook or stock, and investors and analysts fixating on momentum for the Apple Watch, Fitbit shares started last month with a shrug and ended with a slouch.
Now what
Fitbit stock has continued to move lower this month, with shares down roughly 2% in May’s trading so far.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Data source: FIT YCharts.” data-reactid=”57″>Data source: FIT YCharts.
Fitbit published its first-quarter results on May 1, with sales for the period rising roughly 10% year over year to reach $271.9 million and its adjusted net loss narrowing from $41 million to $38.1 million. Despite topping the average analyst sales and earnings estimates, the market didn’t seem to be impressed.
Fitbit is valued at roughly 0.8 times this year’s expected sales — a potentially appealing multiple for a tech company operating in a broader wearables space that still has plenty of long-term potential. Investors will have to weigh that potential against the fact that profits have recently been elusive for the business and the wearables industry is likely to become increasingly competitive.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content=" More From The Motley Fool ” data-reactid=”65″> More From The Motley Fool
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Fitbit. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.” data-reactid=”73″>John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Fitbit. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.
Add Comment