Image source: Fitbit.

Fitbit's (FIT) hot momentum took a breather last week. The stock that had moved nicely higher in four of the five previous trading weeks plunged 12.6% last week, giving back most of the earlier gains. 

This was supposed to be a big week for the leading player in wearable technology. Fitbit's Charge 2 hit retailers earlier in the week, and the highly anticipated update to its top-selling Charge HR fitness tracker was supposed to be a brand-building release. It didn't play out that way.

Fitbit issued a press release on Monday, announcing worldwide retail availability for the Charge 2. Two days later it was Pacific Crest analyst Brad Erickson raining on the hype parade, pointing to channel checks showing weak initial demand.

Fitbit still has you around the wrist

Last week's sharp drop was disheartening, but shares of Fitbit still managed to soar 21% for the entire third quarter. The quarterly gain is notable. Shares of Fitbit initially popped higher after going public in June of last year, but the stock moved lower in its first four full quarters as a public company before bouncing back this time around. 

We can't dismiss Erickson's knocks. He's downgrading the stock -- going from "sector weight" to "underweight" -- after speaking to 15 different big-box retailers. His channel checks showed that the Charge 2 bracelets weren't flying off the shelves, with a couple of weeks of unsold inventory at many outlets. This may not be a surprise. Fitbit isn't Apple (AAPL -0.82%), a company that it competes against directly with its Blaze smartwatch and indirectly with its fitness trackers. Apple draws a media frenzy at every product release. Fitbit's perpetually updating its product lines without a lot of buzz. The Charge 2 wasn't going to find folks lining up at your local cheap-chic retailer the way they do for Apple releases. There are no wireless carriers pumping up new product releases to get folks to shell out big bucks for upgrades they may not need. 

If Charge 2 is a hit, you'll see it in a couple of months with the holiday shopping season rolling around. You'll see it next year, when corporations offer to subsidize the purchase of Charge 2 trackers because they encourage healthier lifestyles, which in turn lowers corporate health insurance costs. 

Erickson's words didn't get fellow analyst heads nodding in agreement. In fact, Wall Street pros at Mizuho, Morgan Stanley, and Raymond James rushed to Fitbit's defense after Erickson's downgrade. However, it was clearly Erickson voicing concerns as we capped off Fitbit's first winning quarter as a public company that weighed on the market. Now it's time to see which way the fundamentals will play out for the Charge 2, Flex, and related accessories that will decide if analysts are right to be betting on accelerating growth this holiday quarter. Fitbit isn't Apple, but both stocks bounced back this past quarter with a lot to prove in the coming months.