Fitbit shares up after results but questions remain, says broker Wedbush
Fitbit Inc (NASDAQ:FIT) shares are up over 14% on Thursday afternoon after the wearable device maker posted first quarter numbers that beat expectations.
But broker Wedbush today repeated a ‘neutral’ rating on the shares, saying it was unwilling to recommend the shares “due to concerns about long-term demand trends for Fitbit products and an unclear product roadmap”.
Analyst Nick McCay noted that although first quarter results exceeded expectations (losses were less than expected) while net revenue was $299mln compared to $280.8mln expected, Fitbit’s guidance for full year 2017 sees a topline decline of between 22% and 31%, with negative earnings.
The analyst says: “Despite reports of a delay for the smartwatch, new product introductions remain on track according to management.”
But he adds: “We have limited visibility into the product pipeline, although Fitbit expects the product price range to remain relatively consistent at $59 to 300. Some key features of the smartwatch are expected to include a focus on health and fitness, a long battery life, and a strong interactive experience.”
The broker also noted that Fitbit did see a “large drop-off” in sales of its newest product - the Alta HR compared to those of the Alta and Blaze last year, at up to $60 million in the latest quarter compared to around $253 million including accessories in the same period of 2016.
Contributing to the fall was a later release within the first quarter and delayed marketing spending, it added.
Fitbit shares added 14.17% in New York to stand at $6.48.
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/177330/fitbit-shares-up-after-results-but-questions-remain-says-broker-wedbush-177330.html
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