Fitbit stock tumbles 11% on concerns exercise buffs don't want tracker

Fitbit (FIT) shares took a dive Thursday, falling as much as 10%, amid concerns that the company's latest fitness trackers aren't catching on with consumers.

In a note to investors Wednesday, Brad Erickson, a research analyst at Pacific Crest Securities, warned the new company's flagship $149.95 Charge 2 is "off to a slow start."

"Our checks are already finding meaningful inventory accumulation in the channel," wrote Erickson, who checked with 15 big-box retailers in the U.S. to gauge the band's performance. "More than two weeks of inventory is on hand and sell-through is below initial Blaze/Alta levels," Fitbit's other recent releases from earlier this year.

Fitbit declined comment.

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Declining interest and sales is just one of the problems, says Erickson. He notes 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."

The battle for fitness trackers, smartwatches and other wearables continues to intensify ahead of the holiday season. With many of the early wearables being adopted by health buffs, the area is getting particular interest from Apple and Samsung.

Apple recently released new versions of its Apple Watch and is prepping to release a more fitness-focused version it developed with Nike in October. Last month Samsung announced it would be coming out with a more durable Gear S3 watch, also due to go on sale this fall. Both devices have placed a heavy focus on fitness and offer more functionality that Fitbit's trackers.

On Tuesday Apple announced an agreement with health care provider Aetna to provide free Apple Watches to the insurer's 50,000 employees and discounts to some of the company's 23 million members.

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Fitbit struck a similar deal with Target last year, giving the retailer's 335,000 employees a free Zip tracker, Fitbit's cheapest device that at the time retailed for $60.

The company's stock soared 12% on that news, but it has fallen 60% since that Sept. 2015 announcement. It closed the Thursday down over 11% at $14.82.

Follow Eli Blumenthal on Twitter @eliblumenthal