Chowdhry: Fitbit Is A Piece Of Junk

Fitbit Inc FIT shares have plunged 43 percent year-to-date. Global Equities Research’s Trip Chowdhry said that there is a further 50 percent downside to the company’s stock. He added that the market was gradually moving away from single purpose devices and is heading towards zero and Fitbit would not be able to reverse this trend.

Fitbit’s Market Could Disappear

Analyst Trip Chowdhry pointed out that Fitbit neither has a developer ecosystem nor an app store, which translates to “zero sustainability power.” In comparison, Apple Inc. AAPL had developed a complete ecosystem around the Apple Watch, including its own developer ecosystem, its own SDK [Software Development Kit], its own Operating System and its own App Store.

Moreover, Apple Watch is a multi-purpose, multi-occasion device, with several “killer use-cases,” including Texting/SMS, Directions/Maps, Notifications and reply - email, messages, Instagram, Appointments/ Calendar, iTranslate [Voice translations from one language to another using built-in mic on Apple Watch] and the Fitness Tracker, Chowdhry mentioned.

“The market for single purpose device, like FITBIT, will disappear in a couple of years,” the analyst wrote. He added that checks at 5 Costco stores indicated that 70-75 percent of Fitbit devices were still on the shelves. “The fair value of FIT is probably 1x Sales at the best. There is further 50% downside to the FIT stock and Fundamental investors should continue to avoid the stock,” Chowdhry added.