![]() ![]() "People don't expect what they buy physically in a store to be linked to what they are buying online," said Christine Bannan, counsel with the advocacy group Electronic Privacy Information Center (EPIC). and others.īut the deal, which has not been previously reported, could raise broader privacy concerns about how much consumer data technology companies like Google quietly absorb. The alliance gave Google an unprecedented asset for measuring retail spending, part of the search giant's strategy to fortify its primary business against onslaughts from Inc. brokered a business partnership during about four years of negotiations, according to four people with knowledge of the deal, three of whom worked on it directly. That's because the companies never told the public about the arrangement.Īlphabet Inc.'s Google and Mastercard Inc. That insight came thanks in part to a stockpile of Mastercard transactions that Google paid for.īut most of the two billion Mastercard holders aren't aware of this behind-the-scenes tracking. Even if that means I’ve missed out on initial gains from the rebound.įor now, Fitbit is not a buy in my view, but it’s also not a short, either.Īs of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.For the past year, select Google advertisers have had access to a potent new tool to track whether the ads they ran online led to a sale at a physical store in the U.S. Buying on confirmation of a improvement rather than buying and hoping for one has served me better in the past. Personally, I would rather buy Fitbit at $8 or $10 once it’s confirmed management is executing and the business is rebounding. For speculative buyers, maybe this is a level they feel comfortable buying at when sentiment is near its worst. If - and this is a big if - management can curtail its executional blunders and regain some momentum, Fitbit stock will likely bottom this year. Be it inventory management or having the right product at the right time. Fitbit has always struggled from an execution standpoint. Reducing expenses and streamlining the business is step one. Again, this is below 2016 results, but gross margins of 42.5% to 44% tops the 38.9% gross margin Fitbit had in fiscal 2016. Management guided for $1.5 billion to $1.7 billion in revenues this year. They are willing to get in now, risking that Fitbit stock falls from $5.75 to $3 to capture a potential rebound to $12, $15 or possibly even higher.Īdmittedly, the risk-reward sounds pretty good. Undoubtedly, some investors like bargain-basement deals and a cheap stock price. My message is clear: I don’t like Fitbit’s business and therefore would not buy FIT stock. I’m not trying to be passive aggressive here. You could make a case for owning Fitbit stock. When I’m looking to put my hard-earned money to work, I want it in companies that have excellent businesses and a strong track record. Based on expectations, 2018 won’t surpass 2016’s results either. Sales and earnings will both fall below 2016 levels. Simply put, Fitbit stock is an unfit investment, because its business clearly hasn’t bottomed. (NASDAQ: GRMN) and Samsung Electronic (OTCMKTS: SSNLF). It doesn’t help that Fitbit is seeing increased competition from Apple Inc. This year, FIT is expected to ring in $1.6 billion in sales and just $1.7 billion in 2018. ![]() In 2016, Fitbit generated $2.17 billion in sales. Following an unprofitable 2016 campaign - losing 12 cents per share - two more potential years of losses isn’t very attractive. For starters, analysts expect FIT to lose 35 cents per share this year and 20 cents per share in 2018. Considering FIT stock’s 90% decline over the past 20 months or so, the risk/reward doesn’t seem all that bad.īut it’s just too hard to get behind the company right now. There are obvious positives going for the stock, as mentioned above. Sounds good, right? Why You Should Avoid Fitbit Stock Considering the struggles the company has had, new leaders and a fresh focus seem like good ideas. Management also went through a shake-up and implemented a new business realignment. Sporting a $1.3 billion market capitalization, FIT has $301 million in cash, $706 million in cash and short-term investments, and no debt.įitbit recently introduced its Alta HR product, the slimmest wristband with continuous heart rate tracking. The positives are getting compelling, though. I want to say, “yes, Fitbit stock is a total buy in the $5 range!” Unfortunately, I can’t. With shares now trading at a lowly $5.75, is it time to buy Fitbit stock? Shares went on to cascade lower, falling about 90% since August 2015. While FIT stock more than doubled from its IPO price, those first thirty days marked its best. ![]()
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