Tag Archives: oud

Fitbit Fails Q1 Physical, Stock Collapses On Q2 Guidance

Fitbit ( FIT ) stock tumbled Thursday after the maker of wearable fitness trackers said increased spending on marketing and R&D will cut into earnings near term. Fitbit shares were down 14%, near 14.50, in morning trading on the stock market today . The stock sliced through its 50-day moving average, a key support level, in touching a six-week low. Late Wednesday, Fitbit smashed Wall Street’s targets for the first quarter , but the company delivered mixed guidance for the current quarter. It earned 10 cents a share excluding items on sales of $505.4 million. Analysts polled by Thomson Reuters expected 3 cents EPS and $444.3 million in sales. On a year-over-year basis, Q1 sales rose 50%, but earnings dropped 63%. For the current quarter, Fitbit is projecting earnings per share of 8 to 11 cents excluding items on sales of $575 million at the midpoint of guidance. Wall Street had been modeling Fitbit to earn 26 cents a share on sales of $531.3 million. Fitbit competes in the health and fitness wearables market with Apple ( AAPL ), Garmin ( GRMN ) and others. Battle Of Fitbit Bulls And Bears Oppenheimer analyst Andrew Uerkwitz reiterated his outperform rating on Fitbit stock with a 12- to 18-month price target of 25. The digital health market is showing strong demand, but Fitbit management “is struggling with the pushes and pulls of operating a rapidly growing business,” he said in a research report. Volatility in operating expenses is pressuring the stock, he says. Fitbit bulls say the company is “striking while the iron is hot” and ramping up marketing and R&D spending to capitalize on the growing market. But bears argue that if Fitbit “takes its foot off the gas, the ride will stop,” Uerkwitz said. FBN Securities analyst Shebly Seyrafi maintained his outperform rating on Fitbit stock but trimmed his price target to 22 from 25. S&P Global analyst Angelo Zino kept his hold rating on Fitbit stock with a price target of 20. “Fitbit is seeing good penetration for its newest devices, Blaze and Alta,” Zino said in a report. “But we are cautious about elevated second-half expectations and intense competitive pressures.” Edison Investment Research analyst Richard Windsor said Fitbit’s higher sales and marketing spending has placed “unrealistic expectations of profitability” in the second half of the year. “This is particularly worrying as there are clear signs that commoditization is forcing the company to increase spending, hitting profits,” he said in a report. To meet its EPS guidance, Fitbit will need to generate 83% of its net profit in the last six months of the year, he said. “Given the environment, this looks to be a very tall order and there is likely a heavy cut to full-year EPS guidance coming either in June or October,” Windsor said. Piper Jaffray analyst Erinn Murphy reiterated her neutral rating on Fitbit, with a price target of 16. “While we are pleased with the traction of new products, we are wary of the Q4-weighted guide and opt to remain on sidelines,” she said in a report. Fitbit Dominates Fitness Device Market On the company’s earnings conference call with analysts, Fitbit CEO James Park expressed confidence in the company’s ability to continue to lead the nascent digital health market. “Fitbit has had an incredible and consistent track record of creating and launching innovative devices and software that people love,” he said. “Over nine years of creating and leading this category, we’ve gained a deep and proprietary understanding of the market and our customers.” San Francisco-based Fitbit is putting a lot of “marketing muscle” worldwide behind its Blaze fitness watch and Alta activity tracker, which were both launched in March, Park said. Retail sales tracker NPD Group on Thursday reported that Fitbit remained the king of connected digital fitness devices in the first quarter. It said Fitbit accounted for 81% of the dollars spent in the category in the U.S. in Q1. Fitbit does most of its business in the U.S. In Q1, 70% of Fitbit’s revenue came from the U.S. Europe, Middle East and Africa contributed 15% of sales, followed by Asia-Pacific with 11%.

CyberArk Slated For ‘Solid’ Q1; FireEye Sales ‘Remain Suppressed’

CyberArk Software ‘s ( CYBR ) first-quarter improvement on health care and higher education sales wasn’t reflected at FireEye ( FEYE ), where product sales “remain suppressed” amid the transition to subscription offerings, an analyst said Thursday. Both are set to report first-quarter earnings late Thursday. Mid-morning on the stock market today , FireEye and CyberArk stocks were each down a fraction, and Dougherty analyst Catharine Trebnick expects solid and in-line reports, respectively, from the duo. Analysts polled by Thomson Reuters project CyberArk to report $43.4 million in sales and 16 cents a share in adjusted earnings, up 32% and flat, respectively, vs. the year-earlier quarter. Demand for CyberArk’s bread and butter, its privileged account management, remains robust, Trebnick wrote in a research report. Trebnick rates CyberArk stock a buy and has a 50 price target on the shares. Several health care bake-offs put CyberArk at the top of vendors’ lists. In one deployment alone, CyberArk’s enterprise vault solutions are being used in 20,000 servers. Higher education, too, is paying dividends, Trebnick wrote. “A number of chief information security officers in this area have selected CyberArk’s solutions, as high turnover in their IT departments (due to staff members often being graduating seniors) drives the need for credential management,” she wrote. For FireEye, however, the first quarter represents another stalled period, as the company transitions to subscriptions — FireEye-as-a-Service and Mandiant incident response — from product sales. FireEye’s network and endpoint product sales have’t improved, Trebnick wrote. “With the HX (endpoint), we did not pick up significant traction, despite recent changes to include exploit detection,” she wrote. “According to one source, the installed base looks to be slow (in) adopting the next generation of code, and many are still running old versions.” But FireEye’s channel is driving increased combination sales, pairing FaaS and Mandiant. The consensus of 35 analysts models $171.8 million in sales, up 37% year over year, and a 50-cent per-share loss minus items widening from a 48-cent loss in the year-earlier quarter. FireEye previously guided to $163 million-$183 million in Q1 billings, which would be up 14% at the midpoint of guidance. Trebnick has a neutral rating on FireEye stock.

Qorvo Sees June ‘Up Significantly’ Despite Apple iPhone Albatross

Qorvo ( QRVO ) skirted Apple ‘s ( AAPL ) iPhone shortfall by regaining Samsung Galaxy S7 share and riding the Chinese carrier aggregation trend, Needham analyst Quinn Bolton said Thursday after the chipmaker’s blowout fiscal Q4. In morning trading on the stock market today , Qorvo stock was up 8%, trading near a three-week high above 48. But shares are down 12.5% year to date on Apple’s weakness. Qorvo’s largest customer — widely assumed to be Apple — accounts for a third of its total sales. Shares of rivals Broadcom ( AVGO ) and Skyworks Solutions ( SWKS ) were up a fraction Thursday morning, after Qorvo’s fiscal Q4 beat late Wednesday. Last week, Skyworks topped fiscal Q2 expectations, but its fiscal Q3 sales guidance lagged by about $50 million, helping send its shares down 6.9%. For Qorvo, the March quarter wrapped up with $608.1 million in sales and $1.04 earnings per share minus items, beating the consensus of 20 analysts polled by Thomson Reuters for $599.2 million and 92 cents. Year over year, sales and EPS fell 4% and 6%. Current-quarter guidance for $650 million in sales and $1.05 EPS ex items was also ahead of analysts’ views for $628.6 million and 96 cents, but that would be down 6% and 12% vs. the year-earlier quarter. On Thursday, at least four analysts boosted their price targets on Qorvo stock. Offsetting Apple’s 24% Fall Mobile sales declined 5% sequentially to $465 million, “driven by content gains on the Galaxy S7 platform that mostly offset a 24% quarter-over-quarter decline in sales to its largest customer,” Bolton wrote in a research report. Industrial and defense products rose 9% to $142 million in sales, also helping offset the hit from Apple, Bolton wrote. Bolton boosted his price target on Qorvo stock to 53 from 50 and reiterated his buy rating. Qorvo is “outperforming smartphone peers with content and share gains,” he said. Behind Apple, Samsung and Huawei are Qorvo’s largest mobile customers, Qorvo CFO Steven Buhaly said on the company’s earnings conference call late Wednesday. Qorvo “took the medicine” in December when Apple iPhone sales began slowing, he said. Outside Apple, mobile sales will be “up significantly” in the June quarter, Steven Creviston, Qorvo’s president of mobile products, said on the call. He credited growth in China and the carrier aggregation trend for the likely growth. In that segment, sales to Chinese ODMs (original design manufacturers) account for 40% of revenue. Carrier aggregation in China is driving demand for Qorvo’s radio-frequency chips, Qorvo CEO Robert Bruggeworth said on the call. Rosenblatt analyst Jun Zhang expects Qorvo to swipe Skyworks’ share on that trend. At Taiwanese MediaTek, Skyworks accounts for 80%-85% of all LTE chipsets, Cowen analyst Timothy Arcuri wrote in a report. He, too, expects Qorvo to aggressively gain share, boosting his price target to 55 from 50 but keeping his market perform rating.