Fitbit Inc. shares dropped as much as 12 percent in late trading after the company, which makes wearable fitness trackers, reported narrower margins in its first earnings report following an initial public offering.
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“It’s not clear why they went down on gross margin”, said Anderson, who’d been modeling for 50 percent. He also said that product announcements have “not yet had meaningful impact on growing our audience” and that Twitter has not “done a great job at aligning the entire company” to its strategy.
The gross margin decline “is a sticking point in what’s otherwise a strong beat-and-raise quarter”, RBC Capital Markets analyst Mark Sue said in a research report Wednesday.
Fitbit (NYSE:FIT) last issued its quarterly earnings results on Wednesday, August 5th. The company has a market cap of $1,631 million and the number of outstanding shares have been calculated to be 36,575,000 shares.
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During the quarter, Fitbit sold 4.5 million connected health and fitness devices, expanded its partnership with the Tory Burch lifestyle brand, teamed up with Kellogg’s to showcase Fitbit Flex on 20 million packages nationwide, and entered into corporate wellness agreements with Geico, Sutter Health, Transunion, Quicken Loans, and several financial institutions. On average, equities research analysts predict that Fitbit will post $0.61 EPS for the current year. The disclosure for this sale can be found here. At the end of the first quarter, a total of 64 of the hedge funds tracked by Insider Monkey held long positions in this stock, up by 22 from the fourth quarter. Just days later, SunTrust Robinson Humphrey, Piper Jaffray, Deutsche Bank, and Stifel Nicolaus expressed similarly bullish opinions to varying degrees, pegging price targets as high as $57. SunTrust lowered Fitbit to a buy rating and lifted their target price for the company from $50.00 to $52.00 in a research report on Thursday. Analysts had looked for Fitbit to generate $0.08 per-share profit on top line of $319 million. Morgan Stanley initiates coverage on Fitbit, Inc. Its wrist-based and clippable devices mechanically track users’ daily steps, calories burned, distance traveled, floors climbed, and active minutes and screen real time feedback to encourage them to become more active in their everyday lives.
