Shares of Fitbit Inc. tumbled 5.7% in premarket trade, after the maker of fitness-tracking wristbands was downgraded at Pacific Crest, which cited signs that the company's flagship holiday product was off to a slow start. Analyst Brad Erickson cut his rating to a rare underweight from sector weight. Through Wednesday, only two of the 187 technology companies covered by Pacific Crest were rated underweight. Erickson said he spoke to numerous big box retailers, and although he found "meaningful inventory accumulation," run rates for the Charge 2 product are below that of Blaze and Alta products earlier this year, "which is a disappointing start, in or view." He is also concerned about Fitbit's core utility issue. "We continue to believe that a large portion of Fitbit owners stop using the device within months, which is a fundamental issue driving high churn and that will make growth more challenging," Erickson wrote in a note to clients. The stock had plunged 44% year to date through Wednesday, while the S&P 500 had gained 6.2%.
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