Tuesday Morning’s Market Insights: Fitbit Inc (NYSE:FIT), Ariad Pharmaceuticals, Inc. (ARIA), NVIDIA Corporation (NVDA), King Digital Entertainment PLC (KING)
Fitbit Inc (NYSE:FIT) shares fell over 7.48% in pre-market trading down to $37.75 after the company released earnings and announced its intention to offer a follow-up offering. The wearable technology company intends to sell 7 million shares of common stock and 14 million shares to certain stockholders. This announcement came on the tails of the company’s third quarter earnings, in which Fitbit posted non-GAAP earnings per share of $0.13, beating analysts’ estimates of $0.10. The company posted quarterly revenue of $409 million, beating analysts’ expectations of $350 million and marking a 168% year-over-year increase. According to TipRanks, 10 analysts are bullish on Fitbit while 4 remain neutral. The average 12-month price target for the stock is $55.60, marking a 36% potential upside from where the stock last closed.
Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) fell 3.36% in pre-market trading down to $6.91 after the biopharmaceutical company released disappointing earnings today before market open. The company posted a net loss of ($0.29) per share, marking a wider loss from the ($0.27) reported in the same quarter one year prior, and wider than the loss analysts anticipated of ($0.20). Ariad posted net product revenue from Iclusig, the company’s lead product used to treat specific forms of leukemia, of $27.5 million. Overall revenue of $29.1 million fell very short of analysts’ expectations of $50.2 million. As of this writing, only one analyst on TipRanks has weighed in on the company in the last 3 months. This analyst, Cory Kasimov, rated the company a Hold with a $9 price target, marking a 25% potential upside from current levels.
NVIDIA Corporation (NASDAQ:NVDA) is down 1.88% in pre-market trading to $28.16 after analyst Rajvindra Gill of Needham & Co. downgraded the technology company from Buy to Hold based on its valuation. Gill applauds that the company has “transformed itself into a platform business and ceased investing in the modem/application processor market,” but now believes the “stock looks fairly valued at current levels, near its two-year peak P/E at 21.8x our CY17 ests.” Furthermore, Gill notes that he has yet “to see tangible evidence that NVDA can replace the INTC royalty payments” and he is waiting for “tangible signs that the licensing business is being replaced before becoming more constructive on the name.” According to the 17 analysts polled by TipRanks in the last 3 months, 6 are bullish on the company and 11 are staying on the sidelines. The average 12-month price target is $25.36, marking a 11% downside from where shares last closed.
King Digital Entertainment PLC (NYSE:KING) rose 15.57% in pre-market trading up to $17.96 following an announcement that the company will be bought out by Activision Blizzard for $5.9 billion, or $18 per share. The deal is expected to close in the spring of 2016, pending approval from King’s shareholders and the Irish High Court. King Digital’s claim to fame is Candy Crush; the addictive cellphone game that became ubiquitous in 2012, however the company has several other successful mobile games. Activision, an American video game company, is best known for Call of Duty. Together, the combined company will have over 500 million monthly active users in nearly 200 countries. According to the company, the combined entity will encompass 10 of the most iconic entertainment franchises on a global scale. As of this writing, 1 analyst polled by TipRanks is bullish King Digital while 4 remain neutral. The average 12-month price target between these 5 analysts is $16.40, marking a 5.53% potential upside from current levels.