In Thursday afternoon trading, Fitbit’s stock price lost more than one-third of its value after the company announced a significant drop in profits.
According to its latest quarterly numbers, the company made $26.1 million in the third quarter of 2016 compared with $45.8 million during the same quarter a year ago.
In mid-September, the company released the Fitbit Charge 2, a mid-range $150 device.
Many financial analysts believe that the market for the popular fitness tracker may be hitting its saturation point. The company’s CEO, James Park, said as much on a call with analysts and reporters on Thursday.
Specifically, Park said that the company was “starting to see some headwinds.” According to the Los Angeles Times, he also noted that sales in Asia had fallen 45 percent to $36 million—“not where we had hoped.”
In the company’s annual report from February 2016, there were hints of potential obstacles. At the time, Fitbit noted that its market was “highly competitive.” The company added:
We believe many of our competitors and potential competitors have significant competitive advantages, including longer operating histories, ability to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services, larger and broader customer bases, more established relationships with a larger number of suppliers, contract manufacturers, and channel partners, greater brand recognition, ability to leverage app stores which they may operate, and greater financial, research and development, marketing, distribution, and other resources than we do.
Between 2011 through 2015, Fitbit made a total of $246 million. It had two profitable years in 2015 and 2014 and losses prior to that.