Fitbit stock is marginally up this year
Shares of wearables company Fitbit (FIT) rose 6.5% on September 18. The stock is currently trading at $5.80, 29% above its 52-week low of $4.51 and 25% below its 52-week high of $7.79.
Fitbit shares have risen just 1.6% this year and have fallen 3.7% in September. The stock rose after a Bloomberg report stated that smartwatches would not be part of the $200 billion worth of Chinese imports affected by the latest round of US tariffs.
While Fitbit sales have fallen in the United States and Western Europe, they have experienced substantial growth in the Asia-Pacific region. Fitbit stock fell 7% shortly after the Apple Watch Series 4 was launched last week.
Of the 17 analysts tracking Fitbit, three have recommended “buys” on the stock, 11 have recommended “holds,” and three have recommended “sells.” The average 12-month target price for Fitbit is $6.39, indicating that it’s trading at a discount of 10% to its current price.
Revenue expected to fall in 2018
Fitbit shares have plummeted over the last two years, first by 75% in 2016 and then by 22% in 2017. The company has been affected by falling sales driven by saturation in developed markets. This saturation has led to Fitbit losing market share to the Apple Watch and China’s (FXI) Xiaomi in the wearables space.
Fitbit’s sales have fallen in a growing wearables market, indicating a user preference for other top brands such as Garmin (GRMN), Fossil (FOSL), Huawei, and Samsung (SSNLF). Fitbit’s revenue is expected to fall 7.7% to $1.49 billion in 2018.
A fall in revenue has also affected Fitbit’s profitability. Its EPS fell from $0.97 in 2015 to -$0.12 in 2016 and -$0.26 in 2017. Its EPS are expected to be -$0.34 in 2018.