Fitbit Poised For Worst Daily Percentage Drop Since June IPO

By Sue ChangMarketWatch Pulse

Fitbit Inc. is poised for its worst daily percentage drop Thursday since its debut in June despite robust quarterly earnings as the maker of wearable fitness-tracking devices posted second-quarter gross margin that missed expectations. Fitbit reported gross margin of 47% when Wall Street had expected 48%, according to analyst Steven Wardell at Leerink Partners who attributed it to a mix of new products. "While a lower gross margin adversely affects earnings, we believe that at this stage of the company's life, investors should focus primarily on topline growth instead of earnings," he said. Wardell also pointed out that the company did not release any details on users with "at least one connection on the Fitbit social network." Shares of Fitbit slumped 14% to $44.32.

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