Fitbit, the fitness tracker company that has dominated its space for years, has failed to impress investors and analysts after announcing that sales and earnings for the first quarter would fall far short of analysts’ forecasts.
Fitbit, known for its wearable wristbands that track steps, calories burned and heartbeats, lost nearly 20% of its value on Tuesday afternoon.
The company’s market valuation fell after 10 Wall Street analysts slashed their price targets on the company.
The company reported strong holiday sales, but investors have grown weary of companies like Fitbit and GoPro, which focus on a single product lineup that can be easily disrupted by larger tech companies, such as Apple and Samsung.
Fitbit has also been hit with bad reviews for its Blaze smartwatch, which debuted in a splashy and expensive Super Bowl commercial.
Analysts are worried that Fitbit, which sells highly fashionable items, will soon lose its ability to sell its products at premium prices in many areas where it dominates its niche.
Fitbit executives said during the company’s conference call with analysts on Monday that it plans to invest a lot more on research and development this year so it can develop software that will make it a digital health leader.
Rising R&D costs and higher marketing prices are worrying analysts, especially at a time when sales may be weakening at the wearable tech company.
With shares at $13.45, Fitbit’s stock is down considerable from last years $20 IPO.