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Wednesday, October 21, 2020

Fitbit Inc. (NYSE:FIT) Stock is Plummeting, Here is Why

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Fitbit Inc. (FIT) shares are trading at lower $6.87 and the avg recommendation for the stock is Hold.

To add more color to this target, the company’s high over the last year is $7.26 and the low is $3.30. Over the last 52 weeks, FIT is up 86.18% while the S&P 500 is up 18.03%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, FIT reported a profit of $93.04 million. Fitbit Inc. also saw revenues increase to $261.27 million. In addition, FIT has free cash flow of -$58.02 million as of 06-2020. The company’s EBITDA came in at -$77.09 million which compares well with its peers.

FIT booked profit margins of -19.80%, its Return on Equity (ROE) is -50.60%, and its Return on Assets is -20.80%. All told, it is clear that, FIT needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. FIT has a short ratio of 9.56 and outstanding shares of 267.87M.

Company Outlook

FIT has seen increased volume after this news and investors are putting their support behind the value proposition. Traders will also note the company’s earnings per share came in at -0.98. Fitbit Inc. FIT also noted assets of $1.04 billion at the end of the last quarter. Investors should also keep an eye on sector updates as FIT has historically followed its peers on positive news.

All told, Fitbit Inc. FIT has strung together solid data and demonstrated underlying fundamentals. At its current valuation, FIT represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Fitbit Inc. FIT is now commanding a market cap of 1.87B and a float of 240.74M. FIT is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of FIT stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in FIT, either long or short, and we have not been compensated for this article.

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