Fitbit (FIT): Lower Demand And Higher Spending Crushed Guidance - Leerink
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Leerink Partners analyst, David Larsen, reiterated his Market Perform rating on shares of Fitbit (NYSE: FIT) and cut his price target to $9 from $16. After FIT reported mostly inline 3Q16 results but lowered the outlook for 4Q16 and beyond. Management cited softness in overall demand from its device portfolio, a pull forward of Charge 2 Sales and manufacturing supply constraints as reasons for the 4Q revenue guide 25% below expectations.
Gross margins expected be down 200bps q/q and S&M spend is spiking for the holidays so FY16 EPS guide was cut 52%. The analyst cut his FY17 estimate from $1.25 to $0.74 on just an 8% revenue growth down from 15%, and lower margins.
Shares of Fitbit closed at $12.81 yesterday.
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