Fitbit Inc (NYSE:FIT) slipped out of the gate this morning, losing 2%-plus before clawing its way back into the green. The reason for the dip in FIT stock? A price-target cut by Piper Jaffray’s Erinn Murphy.
The market hasn’t been easy on FIT stock. It’s down 50%-plus for the year and nearly 60% since going public last June. Those losses have been nearly inexplicable, as Fitbit continued putting up sales and earnings numbers.
Heck, it was just in January that Erinn Murphy jumped to Fitbit’s defense, claiming the selloff up until that point was overdone:
“… the bottom line is this sell-off appears overdone. We are buyers on the weakness. We believe FIT had a strong holiday and see the addition of the Blaze as the net positive to ASPs and potential upside to our FY16 estimates.”
Apparently she doesn’t feel the same way today, and on Amazon.com, Inc (NASDAQ:AMZN) Prime Day no less.
What’s the Deal With FIT Stock?
Murphy notes that the average pricing of Fitbit products is down year-over-year at Amazon.com, with the release of two new products (Alta and Blaze) doing nothing to thwart that price downturn.
Specifically, prices are tracking 6% lower than last year, and Amazon ranks Fitbit products at No. 65 compared to No. 53 in the same period last year.
Murphy also notes, however, that Fitbit is rerouting excess inventory to flash sale sites like Groupon Inc (NASDAQ:GRPN) as it makes room for new products.
All told, Piper Jaffray kept its neutral stance on FIT stock, but lowered its price target from $16 to $14, which is pretty much where FIT stock sits right now. Wells Fargo analysts, too, weighed in, initiating coverage at “market perform” for FIT shares and a target in the range of $14 to $15.
Fitbit next reports earnings on Aug. 3, where analysts expect 11 cents per share on $578.54 million in sales.
So far, in its short life, Fitbit has yet to post a loss at the earnings confessional.
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.
