Shares of Fitbit Inc dropped 14% this week in early trading post the firm claimed that its newly rolled out smartwatch was not trading as anticipated, lifting worries about the ability of the company to turn out to be profitable one more time in the near future. The wearable device manufacturer this week clocked its 5th straight loss of the quarter, gave an unsatisfactory forecast for the quarter one, and recognized competitive stress in the market of smartwatch.
Fitbit, whose multicolored wrist bands for fitness-tracking turned out to be must-haves for fitness fans a couple of years back, has grappled in late quarters as Samsung and Apple increases their game in the market of wearable devices and China’s Xiaomi encourages consumers with affordable goods.
“Noteworthy drops in devices traded year-over-year and noteworthy losses of the quarterly do not motivate confidence in the ability of the company to rapidly return to success,” Alicia Reese, the analyst at Wedbush Securities, claimed to the media in an interview. Shares of Fitbit, which are sealing 76% below their IPO cost, have dropped 10% in the last 1 Year. The short interest on outstanding shares of Fitbit is 16%. Analysts have claimed that the stock cost will carry on to be below pressure in the near future.
The firm claimed this week that that its Ionic smartwatch, rolled out in October 2017 and having a price tag of $300, was not trading as anticipated since it was not a “mass-attraction” smartwatch.
Officials tried to comfort investors that the firm was aimed on trading more devices that might draw a broader consumer base this year. For evaluation, smartwatches of Apple comes in the range of $329 and $1,399. “We might turn out to be more negative on the share if upcoming device roll outs do not adequately differentiate or enhance the ecosystem,” analysts at Morgan Stanley claimed.