Fitbit's stock chart is starting to circle the drain, but all is not lost.
The consumer electronics company, which specializes in wearables that let users track their health, sleep quality, calories burned, and more, released its fourth-quarter earnings Monday. And while profits and revenue handily beat estimates, weak guidance for the first quarter 2016 sent the stock spiraling downward.
Fitbit announced it expects first-quarter revenue in the range of $420 million to $440 million, well below the consensus expectation of $484.6 million, according to Bloomberg.
The company tied the weak guidance to greater manufacturing costs and the launch of new products worldwide, including the Fitbit Blaze and Fitbit Alta.
Fitbit reported fourth-quarter adjusted earnings per share of 35 cents on revenue of $711.6 million, which beat expectations of 25 cents a share on revenue of $648 million, according to Bloomberg.
Fitbit's stock has fallen 55% since its IPO in June. Shares debuted at $30.40, or 52% above the IPO price of $20 a share, and peaked at $51.90 in August.
While Fitbit's stock price is suffering, the age of wearables is clearly upon us. The company is not slowing down in rolling out new products, and peer companies such as Jawbone and traditional players such as Nike are still very much in the wearables market.
But where will that market go?
The health sector is the most promising area for wearables adoption. Several emerging consumer and professional healthcare trends, which dovetail with advances in health technology over the past five years, are driving interest in wearables. And where wearables are most commonly used for fitness-tracking purposes at the moment, they show great potential for widespread adoption in the healthcare sector.
Business Insider Intelligence has compiled a detailed report entitled The Wearables in the Healthcare Sector Report that examines the use cases for wearables in health, ranging from consumers collecting fitness data to healthcare providers and insurers using wearables to improve health outcomes.
The report also explores barriers to widespread adoption of wearables in healthcare and how tech giants, including Apple, Google, and Samsung, are developing devices and platforms that will help bridge the gap between fitness tracking and actual medical care.
Here are some key points from the report:
- While adoption levels are growing, the wearables market is still in the early phases of expansion. We estimate global shipments will increase at a compound annual growth rate (CAGR) of 24.8% over the five years, reaching 162.9 million units in 2020.
- Emerging consumer and professional healthcare trends are driving interest in wearables. For consumers, interest in quantifying personal health metrics is translating into demand for fitness tracking devices and smartwatches. Meanwhile, businesses in a variety of industries have been quick to sense the opportunities for harnessing health data from employees, consumer, and patients to help drive efficiencies and enhance services related to healthcare.
- Barriers remain blocking the widespread adoption of wearables in the healthcare sector. Device accuracy and regulation are two major sticking points for device makers and technologists to address. Concerns surrounding privacy and a lack of utility must also be addressed.
- Consumer-facing products will eventually be used for more advanced medical care. Tech giants, including Apple, Google, and Samsung, are investing significant resources into developing devices that will help bridge the gap between fitness tracking and actual medical care. Future products will serve both consumer and professional markets.
In full, the report:
- Looks at areas of the healthcare sector where wearables may have a tangible impact in years to come.
- Examines what broader trends in healthcare and technology are driving wearables adoption