Fitbit Stock Continues to Hit New Low: What Should You Expect Now?

Fitbit stock

Fitbit stock tumbled last week and made an all-time low after reporting unsatisfactory financial results the previous week. For Fitbit Inc. (NYSE:FIT) investors, it has been an unforgettable 2019 with the stock having shed close to 30% of its value to date, which will be the fourth year in a row that the Fitbit stock shed double-digit percentage.  Despite the gloomy outlook, there is some positive news for Fitbit as it navigates the tide.

Return of Fitness Trackers

Top-line growth in the past year was mainly from the success of the company’s low-priced smartwatches, and for four consecutive quarters, revenue managed to grow after periods of YoY decline. Following the falling short of Versa Lite sales, the focus in the quarter shifted to the wrist-hugging activity monitoring bracelets.

In the second quarter, tracker revenue grew by 51%, which in the process helped in countering the 27% drop in smartwatch revenue. The ordinary selling prices have dropped sharply, and the company has aggravated things by unveiling even cheaper trackers. But following the decline in margins, this might be a good strategy to get growing again with the fitness trackers that put the company on the map.

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Fitbit stock is trading lower by 5% at $3.10 after hitting a new low of $3.08.

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More Opportunities

The company’s overseas opportunities are currently booming, and international revenue grew by 14%, which is part of the 42% top-line results. For the third quarter, the company has offered uninspiring guidance, indicating that revenue is expected to decline by 10% to 15%, which will end a period of four consecutive quarters of top-line gains. Fitbit has indicated that it will continue to perform better internationally than it does in the home market, especially with the attractive pricing of fitness trackers.

Health-Solutions Segment Growing

Initially, as a growth stock, the bullish argument for the company was its ability to capitalize on its market position to develop healthcare products monitoring physical activity. Although it has been slow to play out in the quarter, health-solutions revenue increased by 16%, more than tripling the 5% top-line growth in Q2. The company has predicted the health-solutions segment to generate around $100 million, accounting for 7% of Fitbit’s top-line.

Fitbit stock has tumbled over 40% since the beginning of 2019

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Featured image: DepositPhotos © Thomaspajot