Fitbit Investors Take Profits Following Favorable Reaction To Blaze, Alta Shipment News

The Fitbit Inc FIT battle of bull versus bear continued on Friday as analysts at BlueFin Research Partners issued cautious commentary, while analysts at Leerink countered with a positive sentiment.

Shares of Fitbit were higher by more than 1 percent on Friday, adding to the more than 25 percent gain over the past month, but began to selloff and recently down down 1.6 percent at $14.90.

John Donovan and Steve Mullane of BlueFin argued in a note on Thursday that Fitbit's strategy to expand its product offerings are "ill-timed" and "muddies the waters."

According to the analysts, Fitbit's expansion in to the premium end of the wellnes and fitness market "places them in jeopardy of trying to compete against enemies it has little hope of beating." Specifically, Fitbit stands "zero change" of competing against Apple Inc. AAPL's devices given its "vast" ecosystem and environment.

The analysts also noted Fitbit has done a "fine job" so far, the fact remains the barriers to entry for the mid-to-low-end segment of the market is "minimal."

Related Link: Watch Out: BlueFin Says Fitbit Will Likely Cut Unit Guidance

"What Fitbit has done thus far is to expand its portfolio and frankly the fact that it offers 8 distinct devices in the sub $200 space is confusing to say the least," Donovan and Mullane argued.

Finally, the analysts questioned Fitbit's 1 million shipment figure for its Alta and Blaze devices as it is unclear if the shipments are actual sales or channel fills that will affect future shipments as the devices are absorbed.

Bottom line, Fitbit's "confusing" product line-up translates into a "confused consumer base" and the company need to improve its focus.

Leerink: Sentiment To 'Improve' Near-Term

Steven Wardell and Matt Dellelo commented in a note that Fitbit's 1 million shipment figure of its new devices are slightly better than expected and should help improve sentiment around the stock.

The analysts pointed out Fitbit's stock has tumbled more than 50 percent over the past year. In addition, the stock failed to respond favorably to the new product announcements and the bullish case wasn't helped by "lukewarm" initial reviews.

Looking forward, the analysts suggested that if new Fitbit maintains "decent sales momentum" with its Charge HR, Surge and Flex products, then upside could be seen. However, the company recognizes revenue on a sell-in basis and true success of the Blaze and Alta won't be quantified until the June quarter when reorders occur from retail channels.