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Good day subscribers oh my goodness how long has it been since i opened up a video a good day subscribers well today unfortunately we got to kind of talk about a downer subject and that is fitbit stock we got to talk about fitbit today and if there’s any hope of revival for this company so today this shares hit a new all-time low for the stock when i took this
Screenshot the shares were at four dollars and 76 cents we remember less than three years ago less than three years ago guys about two and a half years ago this was a stock that was over $50 a share and now we’re in a $4 range on this stock guys it’s been absolutely crazy the way this stock he’s absolutely crashed so basically what happened here is they reported
Numbers right the wearable technology company lost two cents per share on revenue of 571 million dollars in the fourth quarter they were expected to do break even and with about revenue of 589 million dollars so right off the top let’s just address that any time a company loses money in their best quarter that gives me a lot of worry these are type of companies
Usually i like to try to stay away from if you’re losing money and your best quarter then that is like a huge turnoff that is not such a bad thing when you’re looking into a stock and you see they they report their best quarter possible that they will report and they still lose money that is really bad so you these numbers a little deeper consumer hardware is
Noticeably a difficult business the company sold fifteen point three million devices for the full year 2017 that’s dramatically down from twenty two point three million they sold in 2016 okay that’s going to continue to put pressure on fitbit the company said to expect a revenue decline of fifteen to twenty percent in the current quarter with consumer demand shifting
Towards smartwatches in 2018 we’ll focus on managing down expenses continue to expand in the smartwatch category in supporting our engaged global community on their health and fitness journey said the ceo there so not good news there guys another quarter expected to have around a fifteen to twenty percent decline in business i remember their last you know 1q last
Year was down dramatically that was a really bad quarter so to see this one down another 15 to 20 percent that means they have not stopped the bleeding they have not stopped the bleeding yet for this company the question is are they anywhere close to stopping the bleeding on this or is it just going to continue that and then then when they talk about managing down
Expenses i think that’s a good thing but at the same time that’s a hoary because it’s like whenever i hear managing down expenses that means you you know you you think your company is just going to continue to become less unless but at that same time i think it should be pretty obvious to management their company isn’t i become less and less and you need to get this
Company back to be profitable there’s no reason why this company just did 571 million dollars in revenue in last three months okay in october november december they did 571 million yeah that wasn’t what any analysts expected yes no what what they used to do but it’s still 571 million dollars in revenue and when you cannot make a profit from that that means you
Were spending way way way too much money on expenses guys look at this a little deeper however the company’s ceo james park is confident that strong sales of its flagship products and a new mass appeal smartwatch will create a significant opportunity to increase our share in the category with the launch of fitbit ionic we not only introduced our first smartwatch
Enabling us to compete in a faster growing segment of the wearables category but we also delivered important foundational assets with fitbit os and sdk part sent in the earnings call while an optimistic about our progress there’s still a lot of work to do we expect this to be a multi-year transition process that will leverage our core assets brand community and
Data to focus around four key things adapting is a changing wearable device market deepening our reach into healthcare increasing our agility and optimizing our cost structure and transforming our business from an episodic driven model centered around device sales into more recurring non device revenue is the route they really want to go there what has become
Increasingly clear is that meaningful and sustained behavior change is hard and requires care and support that extends beyond the doctor’s office park explained with more than 105 million people in the u.s. suffering from pre-diabetes diabetes and or hypertension let alone across the globe there is a significant opportunity to help people prevent from the onset or
Advanced of these conditions that it can start with daily changes in the right support being integrated into a daily life no just real quick i think what he is on there i think that’s correct i mean anything when i look out and i see 10 years from now i see a decade from now in my opinion is gonna be super common for every single person out there to be wearing a
Wearable of some kind i don’t know if it’s gonna be a watch i don’t know if it’s gonna be something that just goes on your skin or whatever and these devices are gonna do magical things they’re gonna be able to tell you ever almost anything you could possibly want to know that a doctors could tell you at a doctor’s office these wearables are gonna be able to tell
You and that’s gonna happen probably within a ten year span it’s gonna be so uncommon for you to find somebody that doesn’t have a wearable on them that’s telling their health it’s like trying to find somebody that doesn’t have a smartphone nowadays that’s the world we’re definitely going into the question is can fit really be the company that gets us there when they
Got direct competition with apple when they got direct competition with samsung we’re talking about the two of them the hardest companies to compete with in the world just as every single smartphone manufacturer in the world what it is like to compete against apple and samsung and they’re gonna tell you it’s pretty much impossible that’s why every single smartphone
Manufacturer isn’t doing crap for numbers men lie women lie numbers don’t lie look at the smart phone numbers apple and samsung are running the whole game so fitbit’s an hour on a straight-up competition with apple and samsung that’s a hard fight to win guys that is a hard fight to win when these companies have the unlimited resources they can funnel into this
When every single company out there on the semiconductor space wants to do direct you know partnerships with apple and samsung who wouldn’t the numbers are there over someone like a fitbit it’s a hard competition so are they going as fitbit after an opportunity that is massive absolutely as far as the wearable game in in devices we’re gonna wear it on ourselves
To check our health constantly i don’t think that’s going away like that’s gonna get more and more popular it’s gonna get super popular but can it really be the company to win that that’s where i really have some questions it’s tough to compete against these big dog companies and never mind all the little guys that are also compete in the wearables game i’m just
Talking about apple and samsung directly that’s tough so if we look at this company if you buy it you’re basically paying a little over a 1 billion dollar valuation for it they have no forward p/e on this company obviously they’re not expected to be profitable any time soon their balance sheet is still phenomenal with this company they still are loaded with cash
And investments 600 million plus in cash and investments and they still got no debt on that balance sheet so it’s still an unbelievably well-run company in the respect of the balance sheet they still got a lot of money there so they can continue to take losses for the next year or two until maybe they can turn around to become a profitable company so what i will
Say with fitbit it’s not a company i’m putting my money in but what i will say with fitbit is i don’t think it’s all like they’re done they’re done as a company they’re not gonna last but i do have a lot of questions on if they can either be the real player in the space and i don’t think there’s any real like in between i think this is one of those companies that
You know five 10 years from now they’re gonna mean nearly a bankrupt company or they’re gonna have to a change their whole business model or something i think they’re gonna either be there or they’re gonna be the company that is the dominant wearable player out there they’re gonna be one of those two the whole oh we’re gonna sell fifteen to twenty million you know
Devices a year i don’t think that’s where they’re going i think they’re either gonna shrink big-time from here or they’re gonna become that you know great company that’s dominant in the wearables category but i got some real questions on if they can achieve that when you’ve got you know direct competition from apple and samsung in the space apple wants to space
Bad we see them funneling more and more resources more and more money into health care into wearables that’s a that’s a segment they want to win they know it’s a huge segment in the future we see samsung doing the same thing samsung really wants to that okay google’s gonna want to win this every big company out there is gonna want to win this and the question is
Who’s gonna win it but right now i tell you it’s not looking good on fitbit side their numbers just going down and getting weaker and weaker and weaker so if you’re getting involved with a stock like fitbit you’ve got to really be playing this one for the next five years plus you’ve got to really be betting on that you believe in that ceo all out there that he’s
Gonna be able to pull this off that he’s gonna be able to be the david in the goliath situation because i really don’t think there’s any in between for a company like this i think they’re either gonna make it huge or they’re gonna you know flounder around and you know someday go out of business or have to completely change their business model around and who knows
What that’s gonna entail so anyways i hope you guys enjoyed this i want to know your opinion on fit and let me let me know in that comment section which you guys think of fitbit in the short term in the long term do you think this is a possible turnaround do you believe in this company at all do you think it’s down and out from here i would love to hear what your
Guys opinion is in that comment section as always anyways hope you guys enjoyed this make sure if you didn’t already get my stock market membership group and you want to get in there get in there it’s a third link in the description there’s less than 48 hours left to get in there for $49 a month after that on march starting on march 1st is going to $99 a month
For anyone who joins at that point thank you for watching guys and have a great day you
Transcribed from video
Fitbit Stock Crashes All Time Low! Any hope? By Financial Education