Fitbit's Stock Is GoPro All Over Again and Raises Huge Red Flags

Shares of fitness products maker Fitbit (FIT) - Get Report  have recently tanked to about $14 from $22, indicating that clearly all is not well at the company.

Therefore, Fitbit's stock is a value trap and not an undervalued growth opportunity, as some might believe.

In fact, Fitbit brings to mind GoPro (GPRO) - Get Report , which also makes health and fitness devices and is known as a manufacturer of action cameras. 

Fitbit shares are down more than 52% this year, while GoPro has halved in value in a little more than five months.

What went wrong, and how do they reflect each other's misfortunes?

Fitbit has been hugely disappointing, after its fairy tale initial public offering last June.

Even after Fitbit beat estimates for first-quarter revenue and earnings per share, investors seem unimpressed. One reason is that the company's guidance for second-quarter earnings is now between 8 and 11 cents a share, below analysts' consensus of 26 cents a share.

Investors are also wary of the company's full-year revenue projection of between $2.5 billion and $2.6 billion and earnings between $1.12 and $1.24 a share, which are above the consensus estimate.

Wearable devices are having a very bad year. Some think that value creation is shifting away from the devices, while consumers have lowered their expectations on the capabilities of the devices.

Regardless, it is increasingly apparent that far better growth opportunities can be found elsewhere.

Fitbit is expected to see a unit growth decline to the mid-30% range from 96% last year. Although wearable device makers have been investing in Europe to drive adoption, the game is still primarily in the United States, where Fitbit gets 70% of its sales.

Cheap smart watches from China, the premium Apple Watch and a brand new one from Fossil continue to make life tougher for Fitbit.

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Fitbit is similar to GoPro in terms of revenue and profits, and the risk of dwindling revenue at Fitbit could drive its stock even lower, similar to what happened to GoPro, where sales keep dropping.

Some analysts contend that Fitbit has all the makings of a growth stock winner for this year, but that doesn't appear to really be the case.

Revenue growth continues to slow, up 50% year over year in the first quarter, 92% year over year in the fourth quarter and 168% year over year in the third quarter. 

Fitbit and GoPro's stocks have often moved in tandem.

For instance, in January shares of Fitbit fell sharply after GoPro issued a fourth-quarter warning and said that it was cutting 7% of its workforce.

Even after a 50% decline in GoPro's stock, analysts have a consensus hold rating, probably mindful of the fact that HERO cameras aren't really the hot item initially believed.

Fitbit's growth could slow further, despite moves that it has made such as buying assets like the wearable payment IP from Coin. 

At 10.02 times forward earnings Fitbit may look cheap, but for that price, investors are better off sticking with technology titan Apple, which is now backed by value investor Warren E. Buffett.

Both Fitbit and GoPro are stocks to avoid at this time.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.