A Stifel analyst wasn’t so nice in their opinion of Fitbit this week which sent shares into the red.
Analyst Jim Duffy of Stifel wrote in a note that was published on Friday that Fitbit has not innovated enough to keep consumers interested. According to Duffy, the company will be burning through cash in 2018 and won’t be profitable.
Duffy wrote, “The franchise and customer database does have strategic value and the balance sheet can sustain cash burn through 2018, but absent a change in direction and sudden acceleration in health care system revenue contribution, we see shares lacking a catalyst (without profits, not even corporate tax reform).”
He also noted that the company has not been able to “unlock any meaningful healthcare business opportunities” or “inspire meaningful new consumer interest in the category.”
Shares fell over 9% on Friday after Duffy’s remarks were revealed. The firm also downgraded the stock to a “sell” rating.
In the last two years, shares of Fitbit have lost more than 85% of their value.
Disclaimer: We have no position in Fitbit Inc. (NYSE: FIT) and have not been compensated for this article.