Fitbit (FIT): Lower Demand And Higher Spending Crushed Guidance - Leerink

November 3, 2016 8:16 AM EDT
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Price: $7.05 -1.12%

Rating Summary:
    4 Buy, 19 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 22 | Down: 16 | New: 13
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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.

For an analyst ratings summary and ratings history on Fitbit click here. For more ratings news on Fitbit click here.

Shares of Fitbit closed at $12.81 yesterday.

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