Do Fitbit Inc (NYSE:FIT) shareholders have a reason to be concerned? Pacific Crest analyst Brad Erickson sure does think so. The analyst just downgraded FIT to Underperform (from Sector Weight), sending shares down nearly 11%.

Erickson explained, “Checks indicate Charge 2, Fitbit’s flagship holiday product, is off to a slow start. Inventory is accumulating in the channel and sell-through is below initial Blaze/ Alta levels. We are raising our Q3 estimates on strong channel fill but lowering Q4 and 2017 on weaker demand, and downgrading to Underweight. We think FIT’s utility problem persists, making growth more challenging and tilting risk/ reward more unfavorable.”

The analyst continued, “We spoke with 15 big box retailers in the United States now that Charge 2 has hit full distribution. Our checks are already finding meaningful inventory accumulation in the channel; more than two weeks of inventory is on hand. While sell-through should ramp meaningfully as the holiday nears, Charge 2 run rates are below where Blaze and Alta began earlier this year, which is a disappointing start, in our view. Based on current run rates and inventory, we estimate the company likely shipped in 600,000-800,000 Charge 2 units in Q3.”

As usual, we recommend taking analyst notes with a grain of salt. According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brad Erickson has a yearly average return of -5.7% and a 50% success rate. Erickson has a -53.1% average return when recommending FIT, and is ranked #3641 out of 4181 analysts.

Out of the 17 analysts polled by TipRanks (in the past 3 months), 11 rate Fitbit stock a Buy, 5 rate the stock a Hold and 1 recommends a Sell. With a return potential of nearly 42%, the stock’s consensus target price stands at $21.11.