|Bid||6.25 x 900|
|Ask||6.45 x 900|
|Day's Range||6.39 - 6.51|
|52 Week Range||4.23 - 7.79|
|Beta (3Y Monthly)||1.13|
|PE Ratio (TTM)||N/A|
|Earnings Date||Feb 27, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||6.63|
The Latest Trends in Tech: Amazon, Google, Cisco, Apple, and Dish(Continued from Prior Part)Smartwatches have been a shining light in the wearables spaceThe wearables (WEAR) space has seen seeing lackluster growth for the last couple of years.
A little more than two months ago, headed into the heart of the holiday shopping season, I cautioned investors that Fitbit (NYSE:FIT) was facing a now or never situation. If FIT stock was ever going to make sustained gains again, the company had to prove its mettle during the fourth quarter of 2018.Little that happened the rest of that month convinced me to change my mind.A key crux of the challenge was, and still is, Fitbit's penchant for aiming at the tough, mid-priced sliver of the smartwatch market, and to some degree the mid-priced fitness tracker market.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * Should You Buy, Sell, Or Hold These 7 Medical Cannabis Stocks? Like most consumer tech, buyers want great value, or lifestyle/aspirational brands like Apple (NASDAQ:AAPL). Working in the middle of the pricing spectrum is tough.Just a few days later, discounting, in some cases, deep discounting, of Fitbit products confirmed my suspicion.If my viewpoint was off-base, we'll know soon enough. Fitbit releases its quarterly numbers on Feb. 25. Just as a suggestion though, fans and owners of FIT stock may want to keep their expectations in check headed into that report. Deep DiscountingJust as a refresher, my chief concern voiced back in December:"… the fact that consumers are still willing to shell out a minimum of $279 for an Apple watch says the right device can still command a premium price. At the other end of the spectrum are sub-$100 smartwatches. They're clearly no Apple device, but they're stunningly cheap and deemed high-tech enough to satisfy the cost-conscious. That leaves Fitbit's Versa in a difficult positions. Priced at $199 apiece, it neither carries the premium Apple name, nor is it the most affordable option for consumers that don't care about labels."Those consumers, it seems, broadly agreed there's not a great deal of demand for a mid-priced option. Less than two weeks later, the Versa's regular retail price of $200 had been lowered to $149 by Amazon. Walmart followed suit a day later.By Dec. 20, some retailers had knocked the price of the Versa down to $90.Even select versions of the Apple SmartWatch saw price cuts a few days in front of Christmas. Its Series 3 device was pared back from a regular price of $309 to $259, and the smaller version of the Series 3, normally priced at $279, could be bought for $229 in mid-December.It's telling, though not necessarily damning. Price competition always ramps up as Christmas approaches.Nevertheless, it's a dynamic that bodes poorly for Fitbit, and by extension, for the value of Fitbit stock. For a few dollars more, consumers could join the much more robust Apple ecosystem of smartwatch apps. For a few bucks less, they could buy an even cheaper, sub-$100 smartwatch from Xiaomi (OTCMKTS:XIACF) that was almost as functional.It should be noted that the price breaks were only temporary, and not necessarily realized by Fitbit for the full quarter.Retailers generally buy inventory outright, paying wholesale prices upfront. Any discounting is ultimately absorbed by the consumer-facing seller.If a retailer finds it's tough to market wares at a profitable price though, direct and indirect pushback ensues. It can (and does) impact subsequent orders. It also forces the manufacturers to lower prices on goods they sell directly to consumers.Both can ultimately lead to crimped margins, which were already shrinking for Fitbit headed into the holiday. The company's third quarter gross margins fell from 45.2% to 40.1% following then-recent launches of the Versa smartwatch and its Charge 3 fitness tracker. It doesn't appear the Versa held onto much pricing power when it needed it most.And yet, even if Fitbit surprises investors, there's still a chance Fitbit stock could be up-ended a few days later. Watch for IDC's Q4 Smartwatch ReportDiscounting isn't the only red flag waving as Fitbit's earnings report nears.Fitbit was the only major smartwatch maker to lose market share during the third quarter of last year. Samsung Electronics (OTCMKTS:SSNLF), Xiaomi and Apple all gained at Fitbit's expense, and though the setback was minimal, it shouldn't have taken shape at all.The Q4 smartwatch market share update from IDC won't likely be posted until early March, well after Fitbit posts its fourth quarter numbers. Nevertheless, it's a report with the potential to move Fitbit stock higher or lower, depending in the interpretation of the data.Given that traders value stocks on a relative as well as an absolute basis, it's certainly conceivable that poor market share numbers -- again -- could work against FIT stock even of the post-earnings response is a bullish one.Somehow though, an encouraging indication for the Fitbit brand from that IDC report isn't apt to unwind a bearish response to the company's news slated for Feb 25. Fitbit has become a "show me" story for many investors. Bottom Line for FIT StockWhile Fitbit is a "show me" name for the time being, it has to be acknowledged the company may have finally found its niche by working with large-scale employers that offer health insurance to its workers.It's called the Inspire, but you won't find it on store shelves. Rather, you'll only get your hands on this particular fitness tracker if your employer wants you to have one, ultimately for the purpose of lowering their tab on offering health benefits.The device is intended to identify health problems early on, and treat them before they become expensive to manage.It's a savvy use of the company's tech, and its brand name.Even so, the institutional market is even less predictable than the consumer market, with sales cycles measured in months rather than weeks. It remains unclear when, or even if, that program will make a dent in sales. It almost certainly won't make a dent in margins, as bulk buyers tend to insist in steep price breaks.However that effort pans out, rough results in the meantime could readily rock FIT stock, and unwind most if not all of the 40% gain claimed from December's lows.Tread lightly here.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 U.S. Stocks That Are Coming to Life Again * The 7 Best Video Game Stocks to Power Up Your Portfolio! * 5 Tips to Become a Better Stock Trader Compare Brokers The post Keep FIT Stock Expectations in Check Ahead of the Q4 Report appeared first on InvestorPlace.
Audio tech maker Sonos, Inc. (NASDAQ:SONO) is having a hard time reversing the strong downtrend in its stock price. And if the CFO retirement and the second-quarter warning weigh any more on its stock, its market capitalization may fall below the $1 billion level. Despite the premium speaker supplier differentiating itself from other brands, cheaper smart speakers from Alphabet (NASDAQ:GOOGL) or Amazon.com (NASDAQ:AMZN) might prolong the glut of Sonos speakers on the market. Investors are looking for bullish reasons to hold SONO stock?Sonos continues to develop consumer interest in its brand. First quarter results showed it can drive sustainable, profitable growth. Revenue grew 6% over last year to $496 million while EBITDA came in at $87 million, up 34%. It now has eight million homes using the speaker product. Each share of SONO stock earned 55 cents diluted, up from 26 cents last year.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe balance sheet is healthy because the firm ended the quarter with $307.4 million in cash, compared to $31.4 billion in long-term debt. * Buy These 5 Stocks to Play the Megatrend of the Century New product launches helped drive revenue in the period. It recently launched Sonos Beam, lifting home theater revenue by 42% Y/Y. With that strong initial pace, investors should expect this segment of the market lifting overall results for the full year. Unfortunately, European consumers haven't yet embraced voice assistant products, with the smart speaker still in its infancy but management it's only a matter of time. Sonos also restrained itself from spending more on sales and marketing. But with a bigger ad budget for the region, Q2 results may not come in as weak as management guided. Disappointing ForecastsA reduced sell-through in Q1 raised Sonos' channel inventory enough to cause management to warn on Q2 results. A delayed production schedule with IKEA, pushed into Q3 instead of Q2, is putting pressure on EBITDA growth for the full year. Sonos forecasts revenue growing 10-12% and in the range of $1.25 billion-$1.275 billion. Adjusted EBITDA growth will be in the range of 20-27%.Investors turned sour on SONO stock because the seasonal Q1 strength, helped by the holiday period, follows with a typically slower period. Then, add in the uncertainties for European customers not yet ready to buy a Sonos product, the retirement of CFO Michael Giannetto, and the revised IKEA product launch. It might seem as if these issues appear temporary but management did not rule out a slowdown in some channels in the U.S. continuing into the current second quarter. New Product IntrosIn addition to the new products introduced last quarter, Sonos could add more speakers and headphones to its product catalog to drive slowing sales. Management has a less risky plan. On the quarterly conference call, they said it could apply its expertise in wireless by further developing cloud connectivity and services. If it were to enter new markets like earphones, it would have to bring some feature that differentiated SONO from the competition. * 10 Best Dividend Stocks to Buy for the Next 10 Months Shareholders should welcome this approach. Too often, companies run with new product introductions only to end up with higher costs and with products that are low margin because they do not add anything new to the mix. Fitbit (NYSE:FIT) and GoPro (NASDAQ:GPRO) are just two examples. Fitbit is now competing with smartwatches while GoPro's video camera competes with the smartphone video capture and video cameras themselves. Valuation on SONO Stock is ToughThere's thin coverage on Wall Street on Sonos stock. The four analysts watching SONO have a $16.50 average price target (links to Tipranks), implying more than 50% upside. Realistically, arriving at a fair value on Sonos' value is tricky because the company has not been a public company for very long. Its revenue potential is difficult to forecast because the company is still in a growth phase.Newly listed stocks are inherently risky and Sonos is no exception. If you try out its product you will know how much better the sound quality is over competitors. Plus, the company does not overcharge for its product. As an investment, though, Sonos stock is still a "show me" play. Fortunately, management is not panicking over the near-term inventory issues and slowing demand. It has the right attitude of delivering a superior product that stands out over the competition. And it is embracing home assistance on the speaker and a quality sound experience. That is a winning attitude that could pay off for Sonos investors.Disclosure: As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 U.S. Stocks That Are Coming to Life Again * The 7 Best Video Game Stocks to Power Up Your Portfolio! * 5 Tips to Become a Better Stock Trader Compare Brokers The post Why Buying Sonos After the Dip Is Not a Leap of Faith By Any Measure appeared first on InvestorPlace.
Trimble's (TRMB) new division poises it as an established global provider of routing, scheduling, visualization and navigation solutions for commercial use.
Fitbit , the leading global wearables brand, today announced that it expects to release results for its fourth quarter and full year 2018 on Wednesday, February 27, after market close.
I understand the attraction of Fitbit (NYSE:FIT) stock. Cash on the balance sheet accounts for almost half the market capitalization of Fitbit stock. And FIT stock, at least on a price-to-revenue basis, is cheap.Source: Shutterstock At the same time, however, I've been a longtime skeptic regarding FIT, and even as Fitbit stock has rallied sharply in 2019 - gaining 30% YTD - that opinion hasn't changed. FIT stock is intriguing from a distance. Looking closer, there are plenty of reasons for caution. Here are three of those reasons that suggest investors should consider taking profits, particularly ahead of Q4 earnings that should arrive later this month. * Buy These 5 Stocks to Play the Megatrend of the Century Reason 1: We've Been Here Before with FIT StockFIT stock now has gained 52% from late October's all-time lows. It's been a great rally for investors who were able to time it properly.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut it's not a rally that suggests something has fundamentally changed with Fitbit stock. Over the past two-plus years, as FIT has remained dead money, rallies have come and gone. Starting in August 2017, FIT climbed from $5 to $7. The gains evaporated in less than six months.It jumped again in May, from under $5 to over $7 in June. By late October, the stock as noted was at an all-time low.Fitbit did post a solid earnings beat in late October, which catalyzed a rally before broad market fears wiped it out. But a 'beat' relative to expectations is not the same as real progress. And the fact remains that Fitbit's story hasn't changed materially, while the stock price has. Reason 2: Fitbit Stock Isn't 'Cheap'With cash on the books over $600 million, Fitbit has an enterprise value under $1 billion. Against 2018 revenue guidance of "approximately" $1.5 billion, that suggests an EV/sales multiple of about 0.6x.That seems cheap. The valuation actually sits modestly below that of fellow hardware play GoPro (NASDAQ:GPRO), who continues to struggle. It's a noted discount to rival Garmin (NASDAQ:GRMN), which trades at almost 4x revenue. Consumer electronics manufacturer Logitech (NASDAQ:LOGI) is at 2x. Move FIT's multiple to even 1x sales, bulls argue, and the stock climbs above $8.But there's a catch here. Fitbit isn't profitable. In fact, it isn't really close. Adjusted EBITDA this year is likely to be in the range of negative $50 million (excluding another $100 million in share-based compensation) based on guidance. Free cash flow is guided to negative $20 million. And Fitbit revenue still is guided to decline this year while in the supposedly strong Q3, revenue rose just 0.3%.A declining, unprofitable business simply can't be called cheap. A turnaround? Sure. But as I detailed last month, Fitbit probably has to grow revenue in the order of 50% simply to become profitable when accounting for the dilution of Fitbit shareholders. The math here, in terms of profitability, still doesn't work. Fitbit is going to need a blowout Q4 and a huge 2019 to even get close to changing that. Reason 3: Competition Isn't Going AnywhereAnd it's tough to grow revenue without market leadership. Fitbit no longer is the market leader; that crown belongs to Apple (NASDAQ:AAPL). And Apple Watch sales, unlike those of Fitbit, are growing, per both SEC filings and management commentary. Garmin is having success as well.Again, there's a case for a turnaround from Fitbit. But even better products suggest a tough road to hoe when it comes to gaining market share. Low-end wearables are going to be commoditized; challenging Apple on the high end of any product is always difficult.The numbers say Fitbit has to grow. The competitive environment suggests that will be difficult. That's a tough combination. But with expectations clearly rising heading into earnings, investors seem to believe that's the path Fitbit is on.Perhaps. Perhaps this time is different. But history and even recent results suggest otherwise. Fitbit does have a fortress balance sheet, and plenty of time to execute its turnaround.That's been the case for two years, however, and FIT stock has provided minimal returns for investors who held over that period. With the stock up 30% already this year, investors looking for more very well could be disappointed.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks That Every 20-Year-Old Should Buy * 10 Best Dividend Stocks to Buy for the Next 10 Months * 10 Monster Growth Stocks to Buy for 2019 and Beyond Compare Brokers The post 3 Reasons to Sell Fitbit Stock Ahead of This Month's Earnings appeared first on InvestorPlace.
Shares of Fitbit (NASDAQ:FIT) are off to a red-hot start in the New Year, with Fitbit stock up more than 35% year-to-date, and we aren't even halfway through February. The big rally can be attributed to a growing feeling on Wall Street that Fitbit's new Versa smartwatch led the wearables company to a strong holiday period. As such, investors have been bidding up Fitbit stock in anticipation of strong fourth-quarter numbers.But, Fitbit stock has come too far, too fast, and is due for a pullback soon.To be sure, Q4 numbers should be really good. There's an increasing amount of data which suggests that Fitbit did have a strong holiday period, led by strong smartwatch sales. That further supports the long-term bull thesis that the worst is over for this company.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Best Dividend Stocks to Buy for the Next 10 Months But, optimism regarding that long-term bull thesis is already fully priced into Fitbit stock. At nearly $7, near- to medium-term upside looks fundamentally limited. But the risk for downside is quite large, both from a technical and fundamental perspective.As such, Fitbit stock is best avoided here. The next big move in the stock will likely be lower. Strong Holiday Numbers In StoreThe 30%+ year-to-date rally in Fitbit stock can be attributed to bullish sentiment regarding Fitbit's holiday period.That bullish sentiment is warranted. According to Google Trends, it does appear that both domestic and global search interest related to the Fitbit brand bounced back this holiday season, after several years of fading interest. Also, it appears this strength was driven by interest in Fitbit's newest smartwatch, Versa. Web-traffic trends are likewise favorable. Also, on Walmart (NYSE:WMT), Target (NYSE:TGT), Amazon (NASDAQ:AMZN), and Best Buy's (NASDAQ:BBY) online bestselling smartwatches lists, Fitbit holds its own against industry heavyweights like Apple (NASDAQ:AAPL), Fossil (NASDAQ:FOSL), and Samsung.In other words, it does seem like Fitbit had a really good holiday period, led by robust smartwatch strength.That's a big deal. The whole Fitbit turnaround is predicated on this company pivoting from dying basic activity tracker company, to growing smartwatch company. This turnaround appears to have taken hold in late 2018. As such, the worst does appear to be in the rearview mirror. From here forward, revenue growth should return to positive territory, gross margins should stabilize, and the opex rate should fall. All together, profitability looks likely within the next several years.Overall, it looks like Fitbit had a really strong holiday quarter, and that gives firepower to the bull thesis that things will only get better from here. Theoretically, that thesis should drive Fitbit stock higher. But, it already has, and further upside looks limited, even if the bull thesis plays out as planned. Good News Is Priced InAs always, things come back to valuation. With respect to Fitbit stock, the valuation simply does not make sense with the stock price around closing in on $7.Long-term fundamentals don't support Fitbit stock at those levels just yet. In a best-case scenario, revenues bottom at $1.5 billion this year, and proceed to grow by ~10% per year over the subsequent five years due to smartwatch growth and data partnerships. Also in a best case scenario, gross margins stabilize around 40%, and operating expenses stay around $800 million even amid increasing revenues.All together, that leads me to believe that a best-case outcome for Fitbit is $0.50 in EPS by fiscal 2023. Based on competitor Garmin's (NYSE:GRMN) average forward P/E multiple of 18, that equates that a fiscal 2022 price target for Fitbit stock of $9. Discounted back by 10% per year, that equates to a fiscal 2019 price target of just under $7.That's where Fitbit stock trades today. As such, fundamentals imply zero upside into the end of 2019.Also, the technicals look stretched here. Fitbit stock is up 45% since Christmas Eve 2018. That huge rally has pushed the stock's Relative Strength Index into overbought territory. It has also pushed the stock nearly 20% above its 50-day moving average. Meanwhile, if you look at the stock chart over the past year, this rally looks more like a cyclical upturn before a cyclical downturn, than a breakout in the stock. * 7 Breakout Stocks In Early 2019 Bottom Line on FIT StockThe underlying narrative and fundamentals supporting Fitbit stock are improving thanks to a successful smartwatch pivot. But, those improvements are more than fully priced in at current levels and with the stock up more than 30% year-to-date. Consequently, the next big move in Fitbit stock will likely be lower.As of this writing, Luke Lango was long TGT, AMZN, BBY, AAPL, and FOSL. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Fundamentally Sound Dividend Stocks to Buy * 5 Reasons Reeling FAANG Stocks Won't Deliver Big Returns * 3 Reasons Canopy Growth Could Burn You Compare Brokers The post Why the Rally in Fitbit Stock May Be on Its Last Legs appeared first on InvestorPlace.
Volatility has slowed considerably, with the S&P 500 closing up or down at least 1% on just six trading days so far this year, which is in stark contrast to 28 such occurrences in 63 trading days in the fourth quarter. The only really big days so far were Jan. 3 (down 2.5%) and Jan. 4 (up 3.4%), which looked like the continuation of a crazy fourth quarter, but it has been fairly quiet since then. Smaller names continue their recovery, albeit at a slower pace, from an awful fourth quarter that saw the Russell 2000 Index down 20%, and the Russell Microcap Index down 22%.
On Friday, Fitbit (NYSE:FIT) quietly released what is expected to be one of the most important products in its lineup. The Fitbit Inspire is a basic activity tracker bracelet (also available as a clip), and the company's cheapest device. But you can't buy one. The new Fitbit Inspire is available only to employees of companies that sign up for a plan with Fitbit Health Solutions. With Fitbit and rival Apple (NASDAQ:AAPL) fighting to get corporate clients to subsidize their health and fitness trackers, the Inspire is the most important product for Fitbit stock since the release of the Versa smartwatch. Fitbit Inspire The new Fitbit Ionic is nothing like the products the company has released recently. It's a basic fitness and activity tracker. It can count steps, track sleep, show calories burned and remind wearers to get up and move. Step up to the Inspire HR, and heart rate tracking and GPS are added. This is a basic, plastic device with a silicone band, also offered as a clip-on. No fancy color display, no premium metal enclosure, and no designer bands. The closest it comes to anything resembling smartwatch functionality is the ability to display smartphone notifications.The approach is similar to one of the cheap Xiaomi fitness trackers that has been eating the low end of the market for the past several years. Fitbit confirmed to CNBC that the Inspire is its least expensive device yet. The company didn't give the actual price, but since it currently sells the Zip tracker for $59.95, that means the Inspire would go for under $60.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Monster Growth Stocks to Buy for 2019 and Beyond But the Fitbit Inspire won't be sold to the public. On its product page, Fitbit describes who can get one of these new fitness trackers:"These special release trackers are available exclusively through Fitbit corporate, wellness, health plan, and health systems partners and customers of their organizations, participants, and members." Targeting the Insurance and Corporate MarketsIt was the release of its own smartwatch -- the Versa -- that's credited with helping to arrest the free fall that Fitbit stock had been in. A pivot to smartwatches that can compete with the Apple Watch also helped FIT post its first profit in two years last October.However, Fitbit's CEO told CNBC that his company's success will be increasingly tied to business customers instead of consumers. The Apple Watch is relentlessly improving, the center of an expanding market of third-party bands, with a wide range of apps available. And it's backed by Apple's huge marketing budget. Meanwhile, Xiaomi continues to churn out cheap fitness trackers that offer the same capabilities as Fitbit models at a fraction of the price. In other words, despite a quarter where the company was finally able to eke out a tiny profit, Fitbit remains stuck between a rock and a hard place when it comes to the consumer market.However, both Fitbit and Apple have found that there's a huge potential market in selling health and fitness devices directly to corporations and health insurance companies. These are corporate customers that have a direct interest in having their members (whether they are employees or individuals covered under a plan) remain as active and healthy as possible. * 7 Breakout Stocks In Early 2019 AAPL is increasingly looking to this market as a potential gold mine for the Apple Watch and its advanced health features. However, not every company or insurance plan is willing to subsidize the cost of such an expensive device. That leaves a big opening for Fitbit, and the company told CNBC that it currently has 6.8 million customers using its devices through various corporate, medical or insurance wellness programs. The new Fitbit Inspire is designed to make signing up through Fitbit Health Solutions an attractive prospect, even for companies with tight budgets.With the Versa smartwatch, Fitbit was finally able to stage the start of a turnaround. However, with Fitbit stock still trading down over 85% from the highs the company hit in 2015, there is plenty of room for that recovery to continue. And with the new Fitbit Inspire, the company is banking on corporate clients and volume purchases to help get it there.As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Fundamentally Sound Dividend Stocks to Buy * 5 Reasons Reeling FAANG Stocks Won't Deliver Big Returns * 3 Reasons Canopy Growth Could Burn You Compare Brokers The post Why You Can't Buy the Fitbit Inspire, FIT's Most Important Release appeared first on InvestorPlace.
Good morning! As the Engadget team limbers up for both Samsung's big Galaxy Unveiled event and the world's biggest mobile phone show (both later this month, we've got two smartphones that balance top-end specs with more wallet-friendly prices.
Fitbit has quietly released a new activity tracker, but don't expect to buyone yourself -- if anything, it'll be issued to you
Fitbit has a new fitness tracker, but it's one that you can't buy in stores. The company quietly uncorked the Inspire on Friday, releasing its first product that is available only to corporate employees and health insurance members. A higher specced model includes heart rate tracking, GPS for fitness tracking and deeper analytics on sleep.
Fitbit quietly unveiled its first business-to-business wearable called Inspire. It's only available to employees and health insurance members who are Fitbit customers. One recent area of focus for Fitbit is selling to seniors through private Medicare plans.
Shares of Sonos (NASDAQ:SONO) dropped sharply after the wireless and home speaker manufacturer reported solid first-quarter numbers that topped analyst estimates, but included a warning about second-quarter revenue growth and uninspiring news that CFO Michael Giannetto would leave the company later this year. In response, SONO stock dropped more than 10%.To be sure, the quarter wasn't all bad news for Sonos. New products sold well in the quarter. Revenue growth was decent. Adjusted EBITDA margins continued to expand, and management maintained their full-year and long term revenue and EBITDA growth targets.But, just because the quarter wasn't a complete disaster, that doesn't mean this dip in SONO stock is worth buying. In fact, quite the opposite. Sonos increasingly looks like a niche consumer hardware company that will follow in the footsteps of GoPro (NASDAQ:GPRO) and Fitbit (NYSE:FIT).InvestorPlace - Stock Market News, Stock Advice & Trading TipsSecond-quarter numbers did nothing to deflate that bear thesis. As such, so long as the prevailing thesis here remains GoPro 2.0, investors should stay away from SONO stock, especially at prices above $10. GoPro 2.0 Thesis Still Holds Water for SonosIn early September, when Sonos was a $20 stock, I wrote a piece on why Sonos looked like GoPro 2.0. * 7 Reasons You Want Boeing Stock in Your Portfolio Broadly speaking, the thesis was that Sonos operates in a niche consumer hardware space with hardware that isn't terribly hard to replicate. Importantly, the company isn't big enough or have enough customers to benefit from network effects, and other companies in this space are much bigger with much larger customer ecosystems. As such, Sonos finds itself in a similar position today as GoPro and Fitbit found themselves in several quarters ago.The GoPro and Fitbit narrative ended poorly. The Sonos narrative will, too. It will come under increasing competitive pressure from bigger players. Sales growth will slow. Margin expansion will slow. Profit growth will slow. The whole company will slow, and that will have a negative impact on SONO stock.It appears the market is buying into this thesis. Since early September, SONO stock has lost about half of its value, and now trades just over $10.There wasn't anything in the Q1 report which provides much relief to bulls. Revenue growth was positive, but it was weak. Adjusted EBITDA margins moved higher, but that's because of lower marketing spend, which is diluting revenue growth. Also, gross margins dropped year-over-year due to an adverse product mix. The long term guide was maintained, but near-term inventory challenges in Q2 call into question the legitimacy of that long term guide.Overall, there was some good news in the first-quarter report, but not enough to override the prevailing bear thesis here. So long as that bear thesis remains front and center, SONO stock will struggle for gains. SONO Stock Isn't Cheap EnoughEven in my realistic best case scenario for Sonos, I don't think SONO stock is worth over $10 today.Management is guiding for long term revenue growth of 10%-plus. That seems aggressive considering slowing growth trends, huge competition, and lessened marketing spend. As such, I think mid-to-high-single-digit revenue growth is much more realistic over the next several years, and that $2 billion in revenue is doable by fiscal 2025.During that stretch, I expect margins to keep heading higher thanks to constrained marketing spend coupled with healthy revenue growth. By fiscal 2025, adjusted EBITDA margins have an opportunity to hit 10%.Under those assumptions, I think a realistic best case scenario for SONO stock is $1 in EPS by fiscal 2025. A market average 16 forward multiple on that implies a fiscal 2024 price target of $16. Discounted back by 10% per year, that equates to a fiscal 2019 price target for SONO stock below $10.Bottom line? The prevailing bear thesis on SONO stock currently looks pretty accurate. So long as revenue growth rates remain depressed and gross margins keep dropping, it won't go away. And so long as that bear thesis sticks around, SONO stock will struggle for gains.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Monster Growth Stocks to Buy for 2019 and Beyond * 7 Cloud Stocks To Buy Now * 5 Undervalued Stocks to Invest In Compare Brokers The post Sonos Stock Still Isn't Cheap Enough to Buy appeared first on InvestorPlace.
Apple (NASDAQ:AAPL) began to steer its Apple Watch smartwatch more directly at the health market when it released the Series 4 in October. One feature was noticeably missing from its efforts, and its an area where rival Fitbit (NYSE:FIT) holds a smartwatch lead: female health tracking. However, it appears that as part of its focus on health, Apple is moving to address this issue. The company has reportedly hired a prominent obstetrician who is expected to help to boost AAPL's efforts in the area of women's health. AAPL Continues Health Focus With Latest HireIn a January interview, Apple CEO Tim Cook pointed to health -- not the iPhone -- as being his company's greatest contribution toward society."If you zoom out into the future, and you look back, and you ask the question, 'What was Apple's greatest contribution to mankind,' it will be about health. Because our business has always been about enriching people's lives. And as we've gotten into healthcare more and more through the Watch and through other things that we've created with ResearchKit and CareKit and putting your medical records on the iPhone, this is a huge deal."InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe company has been investing in health-related projects for years, but one area where AAPL is seen as trailing the competition is in women's health issues. * 7 Cloud Stocks To Buy Now It appears that Apple is looking to rectify this after CNBC reported that Apple has hired prominent obstetrician Dr. Christine Curry. She has been featured in the media for her role in treating pregnant women infected with the Zika virus. According to CNBC's sources, Dr. Curry will be working on various issues across Apple's current health teams, but given her background and focus on women's health it is expected she will be bolstering Apple's efforts in that area.Although the company does offer a Reproductive Health feature as part of HealthKit, it is not particularly well regarded and third-party app makers have been stepping in to fill the void. How the Apple Watch Could BenefitAAPL has been increasingly targeting the health market with its Apple Watch. The potential payoff is considerable, and with Apple stock so reliant on softening iPhone sales, Apple Watch development is progressing at a rapid pace. However, despite the struggles of other smartwatch makers, there is strong competition in the form of Fitbit. The Apple Watch rival has also pivoted to focus on health as well as fitness, and it beat AAPL to the punch when it comes to female health tracking. Fitbit brought a team of obstetricians and gynecologists onboard to help with its software, which was launched last spring. Fitbit's female health-friendly capabilities include period tracking, with notifications that warn when a Fitbit smartwatch wearer's period is expected to start. Fitbit smartwatches can also track expected fertility windows. Bringing women's health features like period tracking to the Apple Watch would address a key Fitbit advantage, and make AAPL's device even more appealing for the health market. Moving Beyond the Apple Watch Focus for Women on Fashion and DesignApple hasn't completely ignored women as customers for the Apple Watch -- with half of its potential user base being female, that would have been a bad misstep. From day one, Apple has offered two sizes of its smartwatch in recognition that women tend to be physically smaller than men and often prefer a watch that is also slightly smaller. (Though to be fair, the difference in size is less than 4 mm.) .Outside of that, the focus on marketing to women has primarily been on fashion. Gold case options skew toward a female demographic, and the company offers a wide selection of fashionable bands. * 7 Reasons You Want Boeing Stock in Your Portfolio Adding female health tracking to the Apple Watch would make the device even more appealing to half of potential buyers and would reinforce AAPL's commitment to healthcare. The hiring of a prominent obstetrician signals that the company is working to focus more on Women's health.It also raises the likelihood that Apple is working on female health tracking features for the Apple Watch, a move that would have nothing but upside for sales.As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Monster Growth Stocks to Buy for 2019 and Beyond * 7 Cloud Stocks To Buy Now * 5 Undervalued Stocks to Invest In Compare Brokers The post Is Improved Female Health Tracking for Apple Watch on the Way? appeared first on InvestorPlace.
Fitbit Inc NYSE:FITView full report here! Summary * ETFs holding this stock have seen outflows over the last one-month * Bearish sentiment is moderate Bearish sentimentShort interest | PositiveShort interest is moderate for FIT with between 5 and 10% of shares outstanding currently on loan. The last change in the short interest score occurred more than 1 month ago and implies that there has been little change in sentiment among investors who seek to profit from falling equity prices. Money flowETF/Index ownership | NegativeETF activity is negative. Over the last one-month, outflows of investor capital in ETFs holding FIT totaled $9.22 billion. Additionally, the rate of outflows appears to be accelerating. Economic sentimentPMI by IHS Markit | NeutralAccording to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Consumer Goods sector is rising. The rate of growth is weak relative to the trend shown over the past year, however. Credit worthinessCredit default swapCDS data is not available for this security.Please send all inquiries related to the report to email@example.com.Charts and report PDFs will only be available for 30 days after publishing.This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
[Editor's note: This story was originally published February 2018.] Even after all the tough breaks the market had in December, the recent turnaround suggests maybe things weren't as dire as they looked. Still there are some companies that could disappear before this year is out. The sad reality is, some companies are too far gone to salvage no matter how well the economy performs in 2019. Profit margins aren't necessarily the problem with a lot of these companies. The problem could be the product or service itself or a horrible reputation that would-be customers just can't shrug off. InvestorPlace - Stock Market News, Stock Advice & Trading Tips With that as the backdrop, here are the eight major companies most likely to pull a vanishing act in 2019. These are companies that could disappear either completely or just in their current form. Their brand names may survive, but the operations themselves simply aren't viable enough. * 7 Stocks That Won Super Bowl Sunday Source: GoPro ### GoPro (GPRO) Just to be clear, you'll likely find GoPro-branded action cameras on store shelves for many years to come. In the same sense Xerox and Google transcended company names and became verbs, GoPro (NASDAQ:GPRO) has successfully become synonymous with action cameras. GoPro is and will remain the standard-bearer for its respective market. That market, however, has been surprisingly small, with no real barrier to entry. The end result? Last year's earnings were abysmal and revenue was flat for the full year. The company is still booking heavy losses too, unable to find or develop a product more consumers just have to have. Even though CEO Nick Woodman held out hope for a buyout of GoPro last year, nobody bit. And at this point it doesn't looks as if anyone will soon. GoPro owners hoping for a generous buyout offer may not want to hold their breath. Source: Shutterstock ### Container Store Group (TCS) The Container Store (NYSE:TCS) still operates more than 80 stores in the U.S. albeit it with much less visibility than it enjoyed several years ago (the last time organization was all the rage). Between cheaper options online and the move from venues like Bed Bath & Beyond (NASDAQ:BBBY) and home improvement retailers like Home Depot (NYSE:HD) to get deeper into the organizational market, The Container Stores simply became less of a draw. * 10 F-Rated Stocks That Could Break Your Portfolio Even though The Container Store got a 50% bounce in January allegedly thanks to the Marie Kondo show, the marketplace isn't going to change back to what it once was. CEO Melissa Reiff should recognize it's better to cash out when there's still something of value left cash out. ### Neiman Marcus Neiman Marcus is not a publicly-traded company, but a noteworthy name to investors all the same. The struggles that the department store chain faces are applicable to other similar chains. Last year CreditRiskMonitor warned that Neiman Marcus' risk of declaring bankruptcy in 2019 was as high as 50%. Over the last two weeks the company seems to be attempting to mount a turnaround with the departure of president and marketing director James Gold and hiring talent away from Apple (NASDAQ: AAPL) and Starboard Cruise Services. But whether these moves can save this company is debatable. The math just doesn't work unless the company can sell more merchandise to more customers at higher prices. Something's got to give sooner or later, and sooner rather than later. Source: Shutterstock ### Immunomedics (IMMU) Investors who've been following the Immunomedics (NASDAQ:IMMU) story for the past several years will know that 2017 was a pivotal year for the company. Sales last year of its oncology diagnostics product LeukoScan were brisk but the FDA denied its request to accelerate approval of Sacituzumab Govitecan. Moreover, aside from the sale of its revenue-bearing LeukoScan intellectual property, it already has sold royalty rights for Sacituzumab Govitecan to Royalty Pharma. * 7 S&P 500 Stocks to Buy That Tore Up Earnings If you read between the lines and study the long-term case, you see that Immunomedics realizes it's running out of money at a pretty quick clip. In fact, the company intends to sell its LeukoScan franchise to help fund the development of the more promising opportunities in that pipeline. There's just not enough money coming in to carry all the weight the company needs carried. Source: Shutterstock ### Remington Remington is another privately-held company that investors may want to keep close tabs on, as what's happening to it could apply to rivals like Sturm Ruger & Company Inc (NYSE:RGR). The firearm manufacturer just barely was able to emerge from bankruptcy. This may be a case, however, where restructuring and more time don't solve the true, underlying problem. That is that consumers just don't want the guns Remington is making. Remington was sued over the 2012 Sandy Hook shooting, and many investors have distanced themselves since. This, along with potential for stricter gun laws in the foreseeable future, means there may not be any growth in Remington's futures. Source: Shutterstock ### Sears (SHLD) The company's downfall has been predicted many times before. With each passing year, however, Sears (NASDAQ:SHLD) moves closer to the edge of the cliff. This year may be the year it finally falls off. It recently escaped liquidation by the skin of its teeth when hedge-fund manager Edward Lampert put up $5.3 billion to keep Sears solvent, for now. But the thing is, Sears hasn't turned a full-year profit since 2011. Lampert spent last year breaking Sears into pieces and he's running out of things to sell as the company continues bleeding income. Source: Shutterstock ### Southeastern Grocers You've probably not heard of Southeastern Grocers. That's because, aside from not being a publicly-traded entity, it doesn't do business under its corporate name. You've probably heard of its stores though, particularly if you're from the south. It's the owner of BI-LO, Harveys, Winn-Dixie and Fresco y Mas grocery stores, some of which have been around for eons. Right now, Southeastern Grocers is the nation's eleventh-largest grocery store network. In the modern era, however, that isn't a whole lot better than being the fiftieth largest. It's business that relies on scale, and lots of it. Kroger Co (NYSE:KR) and Amazon.com, Inc. (NASDAQ:AMZN) have it. Southeastern Grocers doesn't. Last year, chatter first surfaced that the company wouldn't even come close to making the full service payments due on its $1 billion in debt. Increasingly, it looks as if it will fall to Amazon before too long. Source: Fitbit ### Fitbit (FIT) Last but not least, add Fitbit Inc (NYSE:FIT) to your list of companies that won't be around as you know and love them today. Like GoPro and Sears, you can reasonably expect consumer technology with the Fitbit name on them to still be in stores come 2020. The organization has worked hard to develop the brand into the name people think of when they think of wearables. Much like GoPro though, this is a company that thought its wares were far more marketable then they actually were. As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Boring Stocks to Buy for Red-Hot Returns * The 7 Best Car Stocks to Park in Your Portfolio * 7 Beaten-Down Chinese Stocks Ready to Rebound Compare Brokers The post 8 Companies That Could Disappear Before 2019 Is Over appeared first on InvestorPlace.
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card! If you're interested in Fitbit, Inc. (NYSE:FIT), Read More...
When it comes to stock-picking in general and General Electric (NYSE:GE) stock in particular, number crunching isn't the end-all, be-all. Number crunching would not have predicted in 2010 that Amazon (NYSE:AMZN) would be generating large profits in a few years. It wouldn't have predicted in 2000 that Apple (NASDAQ:AAPL) would soon become a tech powerhouse. And the number crunchers didn't predict the recent resurgence of solar stocks or the imminent return to profitability of Fitbit (NASDAQ:FIT)and BlackBerry (NYSE:BB). Financial data is certainly an important part of stock picking, but in recent years, Wall Street has been overly focused on the numbers and has largely ignored SWOT (strength, weakness, opportunity,threat) analysis, which is just as, if not more important, as number crunching. InvestorPlace - Stock Market News, Stock Advice & Trading Tips When analyzing GE stock recently, much of the Street has appeared to be focusing only on the numbers and has been ignoring the company's strengths and opportunities. Specifically, the company is a leader in two sectors with powerful growth catalysts (electricity and aviation), and it has a new CEO with a great track record. * 5 Top Consumer Stocks for 2019 -- According to Wells Fargo Moreover, although the company is facing staggering debt and some important "known unknowns," its short-term financial issues may not be that insurmountable. Therefore, although GE stock is more suited for long-term speculators than conservative investors at this point, it does look like a good speculative bet. Here are three reasons to be bullish on GE stock as the company prepares to report its fourth-quarter results tomorrow, January 31, before the market opens. ### #1 GE Is a Leader in Two Strong Sectors The success of GE's aviation unit speaks for itself. In the first three quarters of 2018, the unit's orders surged 35% year-over-year to $26.7 billion and its profit jumped 25% to $1.665 billion. Meanwhile, aerospace markets look likely to continue their strength as developing economies add many more aircraft and most airlines in the developed world continue to be profitable. If GE's Q4 results show that the unit continued to be strong, the owners of GE stock should be encouraged by that ongoing trend. Meanwhile, as I've written multiple times in the past, GE's Power unit looks poised to strengthen from increased demand for electricity. As electricity demand increases, more power stations will have to be built, and that will require more of GE's equipment. And despite worries that natural gas will be supplanted by the growth of solar energy, hurting GE's gas turbine business and GE stock, the U.S. Energy Information Administration expects electricity generated by natural gas to rise to 4.028 trillion kWh per day this year -- up from 4.016 trillion in 2018. The trend is expected to continue next year, when natural gas is anticipated to generate 4.164 trillion kWh per day. And although EIA expects U.S. electricity demand to drop slightly this year due to a relatively cool summer, world electricity usage continues to trend upward, and many predict that U.S. electricity demand will rise over the longer term. Moreover, as I've pointed out in the past, in certain areas, such as California and China, large-scale use of electric cars will force utilities to enhance their power stations. As I noted in my January 10 column on GE stock: "Mechanical difficulties with GE's turbines may actually have been what caused the unit's woes. Culp's decision to name John Rice, a retired GE vice chairman, to oversee the troubled unit, could very well help improve the division's results." Additionally, CEO H. Lawrence Culp Jr. has said in November that the unit is "getting close to a bottom." Tomorrow, the owners of GE stock should pay close attention to and analyze any plans and guidance for the power unit. ### #2 The Known, Near-Term Financial Issues Look Solvable As I noted in my previous column: "If GE is able to clear $15 billion from the healthcare unit IPO, $9 billion from its jet-leasing sale, and $5 billion from the slated sale of its Baker Hughes stake, it will have raised $25 billion of cash. Suddenly, the $26 billion of bond payments that the company must make over the next two years doesn't seem so steep." Some analysts, however, have recently focused on the "known unknowns" and on speculation involving GE's asset sales to support their bearish views on GE stock. For example, in a well-publicized note issued last week, J.P. Morgan analyst Stephen Tusa said that this month's rally of GE stock stemmed from "hope." The analyst speculated that GE would receive much less than $40 billion for its jet-leasing business, which is the amount that Bloomberg had reported was under discussion. According to MarketWatch, the analyst also wrote that any deal for the unit "would 'wipe out' all of [the unit's] equity, which he already estimates to be zero to GE shareholders on a cash basis." Also issuing a negative note on GE stock recently was Gordon Haskett analyst John Inch, who said that GE stock could have a negative value after GE sells the assets it's planning to unload. Like J.P. Morgan's Tusa, Inch's note is based on speculation about GE's asset sales. Inch also focuses on the company's total debt, which he estimates at $144 billion to $203 billion. I think it's more practical to focus on the value of the company's bonds through 2020, which seems to have been reliably pegged at a manageable $26 billion. Longer-term debt and other liabilities -- like pensions -- could be renegotiated, especially if the company's business is performing pretty well, making all creditors convinced that GE will remain solvent. ### #3 The New CEO Larry Culp, GE's new CEO, had a stellar turnaround record as CEO of Danaher (NYSE:DHR), where he "more than quintupled the company's market value and revenues" during his time at the helm of the conglomerate. Obviously, the man knows what he's doing when it comes to managing and improving large companies. Importantly, he is also an expert in and proponent of a system called the Toyota Production System that could really boost GE's profits and GE stock by reducing the company's waste. ### The Bottom Line on GE Stock GE is highly leveraged to two sectors with powerful growth catalysts: electricity production and aviation. GE's main near-term and medium-term financial problems seem manageable, and it has a CEO with a stellar track record who's also an expert at reducing waste. * 10 Stocks to Sell in February Although the company's possible financial difficulties make GE stock unsuitable for conservative investors, it's a good name for investors who want to speculate on a company that has an excellent chance of making a huge comeback. As of this writing, the author owned shares of BlackBerry and Fitbit. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Smart Money Stocks to Buy for the Rest of the Year * 10 Best Consumer Stocks to Buy in 2019 * 10 Triple-A Stocks to Buy in February Compare Brokers The post 3 Reasons to Be Bullish on GE Stock Ahead of Earnings appeared first on InvestorPlace.
NEW YORK, Jan. 29, 2019 -- In new independent research reports released early this morning, Market Source Research released its latest key findings for all current investors,.