Since it went public back in 2015, we’ve seen activity tracker firm Fitbit Inc. (NYSE: FIT) deteriorate rapidly. The company has drawn comparisons to BlackBerry: Although it was the first to come out with a popular fitness tracker, it has quickly been swallowed up by its larger and more adept competitors. With Fitbit stock trading at just over $5 per share, many are wondering if there could be any potential upside to taking a position, however outside of an acquisition. FIT looks unlikely to make any kind of meaningful comeback because the firm has fallen by the wayside in the wearables space.

One thing that Fitbit stock bulls point to is the company’s financial strength. Not only does the firm have absolutely no long-term debt, but Fitbit is sitting on more than $650 million in cash. While the company’s spending has been exorbitant over the past few quarters as management worked to get FIT back on track, cashflow is expected to break even in 2018. There’s definitely something of a safety net there that Fitbit can use to figure out how to move forward.

Where to Turn

The trouble is I’m not sure there’s really anywhere for FIT to go. I believe that barring some kind of incredible update to its current offerings, Fitbit has effectively missed the boat on wearables. Its activity trackers were all the rage a few years ago, but as the public moved on to smartwatches, Fitbit missed the memo. 

The firm’s efforts to create a fully functional smartwatch and software as a service package have been valiant. But it was too little too late. The fact remains that there are better and more convenient options out there that people prefer. With that in mind, it’s hard to see where exactly Fitbit can maneuver to avoid eventually fading into oblivion. 

FIT’s Medical Side

Again, I think its commendable what management has done to try to position Fitbit as an asset in the healthcare space but ultimately those moves are unlikely to yield any real benefits. On one hand, FIT has been able to tie its devices to powerful allies in the healthcare community both through its partnership with Alphabet Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) and its acquisition of Twice Health, a platform that connects doctors with patient data. However, as Fitbit devices are not certified medical devices and have even been questioned about their reliability, its debatable how much doctors will actually use Fitbit-related data. As is, I don’t see the devices becoming part of a larger health initiative.

Future Looks Bleak for Fitbit Stock

The only real hope for Fitbit stock is an acquisition. There are a few potential suitors out there like Alphabet — which already has a partnership with FIT and might find their devices and software useful as they continue to move forward into the healthcare space. However, outside of a buy-out, there’s not much hope.

Fitbit has some clout as a fitness tracking company, especially since they were first on the scene — which has helped carry the firm this far. However, the name along with the devices are starting to lose their luster. When you think about wearables, Apple Inc. (NASDAQ: AAPL) and Samsung Electronics Co Ltd (OTCMKTS:SSNLF) are easily the first to come to mind. Fitbit lacks the diversity to lean on another part of its business while it works to make a comeback and the firm’s efforts to produce a turnaround have been solid but fruitless. 

In 2017 Fitbit saw its marketshare in the wearables space fall to 13.3% from 21.5% a year earlier and there’s no reason to believe that trend won’t continue in the year to come. In the first quarter,  FIT management guided for wider losses and did very little to convince investors that a turnaround was on the horizon.

So far, the healthcare push and more fully featured smartwatches appear to be Fitbit stock’s only lifelines for the future and neither looks likely to deliver a promising rescue. Unless management can pull a rabbit out of its hat in the next few quarters and come up with a new direction for the business, it’s difficult to see a floor for Fitbit stock.

Unless M&A chatter starts to pick up and some credible offers are on the table, I’d stay far, far away from FIT stock.

As of this writing, Laura Hoy was long AAPL.