Fitbit shares hit all-time low on grim growth outlook
SAN FRANCISCO (AP) — Fitbit Inc. shares tumbled more than 33 percent to an all-time low Thursday after the company lowered expectations for next quarter and 2016.
The abrupt softening of U.S. demand led the San Francisco-based wearable device maker on Wednesday to cut its fourth-quarter revenue guidance to between $725 million and $750 million from previous estimates of about $985 million. Fitbit also cut its earnings per share guidance for 2016 in half, to between 55 and 59 cents per share from a range of $1.12 to $1.24 per share.
Ramon Llamas, a research manager who studies the wearable device industry for International Data Corp., said hype over fitness trackers may have finally waned after multiple years of double-digit growth. But he added, “All of this doom and gloom — I’m not buying.”
The industry is “realigning and reassessing” the market, Llamas said. While many companies are offering similar products, Fitbit is well-positioned to introduce new products with expanded capabilities, he added.
Fitbit’s shares have fallen about 77 percent in the last 12 months. They closed Thursday down $4.30 to $8.51 after touching a low of $8.37.