(Bloomberg) -- Fitbit Inc.'s troubles aren't letting up.
Shares of the wearable health-device company fell 7.5 percent to $4.72 at 9:34 a.m. in New York after Morgan Stanley recommended investors sell the stock, saying Fitbit's plans to focus more on software instead of devices are uncertain and will take time to bear fruit.
Fitbit, which helped pioneer the fitness-tracking industry, has been squeezed between Apple Inc.'s high-end watch and cheaper options by companies like Xiaomi Corp. In February, Fitbit reported sales that missed analysts' estimates in the crucial holiday quarter. Now, it's working to produce a new watch meant to have broader consumer appeal, while at the same time building digital-health software aimed at corporate customers.
“New smartwatches will be outweighed by declines in legacy products, while software opportunities in health coaching will take time to ramp,” Morgan Stanley analyst Yuuji Anderson wrote in a note to clients. Anderson has recommended holding the stock since at least July 2017, according to data compiled by Bloomberg.
Seven other analysts recommend holding while three rate the shares a buy.
To contact the reporter on this story: Gerrit De Vynck in New York at gdevynck@bloomberg.net.
To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Molly Schuetz, Lisa Wolfson
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