Fitbit's guidance is not inspiring confidence among analysts
Fitbit Inc (NYSE:FIT) stock is getting pummeled today, down 12% to trade at $4.89 -- and just off a new record low of $4.67 -- after the wearable tech maker reported fourth-quarter earnings and revenue short of expectations. The company also issued a disappointing forecast for the current quarter. In response, three brokerage firms issued price-target cuts, including to $5 from $6 at Morgan Stanley, which warned that it "would become further negative on the stock if coming smartwatch launches do not sufficiently improve or differentiate the ecosystem."
FIT stock is on track to post its worst-single day loss since January 2017 -- much to the delight of recent options traders. Data from International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows FIT with a 10-day put/call volume ratio of 0.84, ranking in the 94th percentile of its annual range. This indicates puts have been purchased over calls at a faster-than-usual clip over the past two weeks.
Plenty of short sellers are likely toasting the collapse today, though FIT is on the short-sale restricted list. Short interest increased by 22% during the last two reporting periods, to 38.01 million shares, the highest point since mid-August. This represents a whopping 20% of FIT's total available float.