Stocks To Watch: Fitbit Inc [NYSE: FIT] has dropped significantly in pre-market trading. At the time of writing, it is down by 16.90% to trade at $3.49. However, this drop is not unique to Fitbit. The stock markets have been in the red since yesterday. At yesterday’s close, the NASDAQ was down by 1.19%, the DOW by 1.23% and the S&P 500 by 1.09%.
This followed news that the Fed was cutting interest rates by 25 basis points. While a rate cut is usually good for the stock markets, there are mixed reactions on this one from Wall Street. Some were expecting a more aggressive rate cut, while others feel that it is an indicator that the Fed has lost its independence. It is in this environment of caution that Fitbit announced its Q2 results.
The company’s results are largely positive, and paint a picture of growth. It reported an EPS loss of $0.14 against analysts’ expectation of $0.18. Not only did it beat expectations, but it also represents a significant improvement from last year when it recorded an EPS loss of around $0.22. Revenue numbers also rose slightly compared to a year ago. In Q2, its revenues stood at around $313.56 million, as compared to $299.34 million last year.
However, the company noted that there was a market weakness in some of its products. The company noted that Versa Lite, its smartwatch product did not meet expectations. It attributes this to its marketing strategy. Their intention is to give consumers a smartwatch with core features at a relatively low price.
But, even with such weakness, it still beat major brands like Samsung in the Smartwatch category. Other products in the company’s basket are performing well. For instance, its trackers have accelerated in sales to hit about $181 million. This represents a growth of roughly 51% when compared to the previous quarter, and a positive indicator of the company’s diversified product portfolio.