Pacific Crest analyst Brad Erickson is out with new insights on Fitbit Inc (NYSE:FIT). Despite having recently downgraded the fitness tracking giant to an Underweight rating, with unchanged views but less visibility, the analyst upgrades to a Sector Weight rating on FIT with a fair value estimate of approximately $8, which represents a 15% downside from where the shares last closed.

Erickson explains, “While our views of maturity for wearables driving headwinds to growth remain, the stock now more fully reflects the skepticism we expressed in our Sept. 29 downgrade to Underweight. Volatility unrelated to fundamentals could persist, reducing our visibility on the shares; this prompts us to upgrade to Sector Weight.”

For now, “FIT becomes a knife fight from here. Our views that drove our Sept. 29 downgrade to Underweight have not changed. However, given the depressed valuation in the eyes of some investors, significant volatility unrelated to fundamentals could remain, as highlighted by a potentially fictitious bid to acquire the company filed with the SEC last week. This greatly reduces our visibility on the shares, even as Fitbit faces increasingly stiffening headwinds to growth, driven by a lack of utility and poor user trends, in our view.”

“Our bias remains negative, but significantly more skepticism is now priced in,” Erickson contends, no longer liking the risk/reward in a strategy of remaining short on the stock.

For the fourth quarter, the analyst forecasts $0.18 in EPS for FIT, just above the Street’s estimate for $0.17, and $747.9 million in revenue, hitting ahead of consensus at $740.7 million.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, one-star analyst Brad Erickson is ranked #3,622 out of 4,226 analysts. Erickson has a 50% success rate and faces a loss of 4.7% in his annual returns. When recommending FIT, Erickson loses 29.6% in average profits on the stock.

TipRanks analytics demonstrate FIT as a Hold. Based on 19 analysts polled in the last 3 months, 2 rate a Buy on FIT, 16 maintain a Hold, while 1 issues a Sell. The 12-month price target stands at $10.07, marking a 6% upside from where the stock is currently trading.screen-shot-11-17-16-at-02-23-pm