Fitbit chart

The uncertainty surrounding Fitbit, in regard to its earnings release, has always been skewed to the downside for me.  Never has pressure on independent hard tech companies been so great.  Indeed, very recently, the result of smaller hardware technology companies competing against the likes of Apple and Samsung and other technology behemoths was shown abundantly in GoPro’s earning’s release.  We can agree that, like GoPro, Fitbit’s tech hardware is mildly successful and has a core customer base: GoPro with its camera recording equipment and Fitbit with its wearable health tracking devices.

The problem with this is two-fold: Firstly, the beauty of tech is its continuous change and progress. The flipside is that the development of new products is both expensive and laborious. Secondly, so powerful are mobile phone devices in 2018 that you already have the virtues of GoPro’s and Fitbit’s products on your phone.

Herein lies the issue – does the consumer need another device to purchase, maintain, and charge when their current mobile phone does all of these tasks incredibly well? I would say, likely not.  On that basis, Fitbit’s woes continue as its most recent earnings release yesterday shows the full effects of this.  For Q1, losses for Fitbit balloon to 18 cents a share. Analysts had expected just 9 cents a share loss. In addition, revenue for Q4 came in at $570.8 million, again lower than the expectation of $588.9 million.

Going forward, the company faces an uphill battle as investors will look at the share performance, currently trading near all-time lows of $5, with the shares having been at $40 in December 2015.

Chief Trader,

Jordan Hiscott

The above-mentioned market views and content reflect only the opinion of the author, not that of ayondo. This service is for informational purposes only and does not constitute advice or investment advice.

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