Fitbit's stock has been dropping rather significant over the past few months (down over 30% in the past six months), and now analysts at Morgan Stanley have downgraded it to "underweight", noting that it is "hard to see a floor" for the stock. Which means that it's hard to see how low this stock can actually go. Fitbit's main issues right now stem from customers wanting more choices of products, but also Fitbit selling fewer products in 2017 than it did in 2016. In 2017, Fitbit sold 15.3 million products, versus 22.3 million in 2016. Of course, that is likely due to the increase in competition from the likes of Apple, Samsung and even Nokia (after its purchase of Withings) in the wearables space.
In a research note, Morgan Stanley analyst Yuuji Anderson stated that "Fitbit management has spoken often on the value of its data set, but we believe its strategic value also has limitations." Anderson also mentioned that Fitbit's competitors have been focusing more on health data, and also creating partnership agreements with other companies, like Under Armour. Which led to Anderson stating that they "see more downside to the stock as revenues struggle to stabilize and cash burn resumes." Though, Anderson does believe that "new smartwatches will be outweighed by declines in legacy products."
Recently, Fitbit has been producing some new smartwatches – after its Pebble acquisition earlier this year – with the Ionic last fall and the Versa this year. The Fitbit Versa isn't slated to be available until later this month, so only time will tell how well its newest smartwatch will perform. The Versa is a cheaper and smaller smartwatch from Fitbit, and one that will likely be a better seller. Fitbit's stock price is now down in the $4 range with a market cap of $1.22 billion, after its IPO price of $30.40 and market cap of $4.1 billion back in June of 2015. So things haven't been that great for Fitbit since it went public a little under three years ago, but its upcoming launches should help turn it around.