Fitbit (FIT): Is The Stock Worth Investing In?

4:53 pm ET, 16 Apr 2018

The Fitbit stock (NYSE: FIT) barely moved today.  What is the stock price forecast for this company?

And what are the things you should know about this stock?

Fitbit offers a range of health devices and is gradually gaining steam since the holiday season of this year.

But in the previous year, the company had a turbulent period. Sales declined by 25% because the company's products didn’t cater to consumer demands, and the competition was very aggressive.  The Fitbit smartwatch proved to be a dud.   

It is necessary for the company to focus on hardware and software aspects of its smartwatches, to stand up against the stiff competition from its rivals, such as Garmin and Apple.  

A huge discount offered to investors today is a clear indication of the challenges the company faces. 

Should you invest in Fitbit’s stock? Per Finstead Research, the company’s shares have the average price target of almost $7.  The stock has an upside of about 21% (vs. current price).

The Fitbit stock has a negative valuation, which indicates that the company registered losses in the past. Trading negative-P/E shares is highly speculative.

Fitbit has a high short share of float, compared to the industry and sector averages. This indicates high potential volatility in the upcoming days.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Fitbit, Inc. (FIT) Stock Guide

Updated at: 7:29 am ET, 12 Jul 2020

Before we start: if you're looking for FIT stock price, you can quickly find it out by visiting Finny and typing "FIT quote". If you're looking for a quick scoop on FIT stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "FIT". You'll get all this info in one place. Or you can just type "FIT news" to get the latest stock news.

Looking to buy or sell Fitbit, Inc. (FIT)? Interested in getting the full scoop on FIT, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this FIT stock guide, we'll address key questions about FIT, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are FIT earnings?
2. When is FIT earnings date?
3. What is FIT stock forecast (i.e., prediction)?
4. FIT buy or sell? What is FIT Finny Score?
5. What are the reasons to buy FIT? Why should I buy FIT stock?
6. What are the reasons to sell FIT? Why should I sell FIT stock?
7. What are FIT key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are FIT earnings?

FIT trailing 12-month earnings per share (EPS) is -$0.86.

2. When is FIT earnings date?

FIT earnings date is July 29, 2020.

Analyst Predictions

3. What is FIT stock forecast (i.e., prediction)?

Based on FIT analyst price targets, FIT stock forecast is $7.35 (for a year from now). That means the average analyst price target for FIT stock is $7.35. The prediction is based on 15 analyst estimates.

The low price target for FIT is $7.35, while the high price target is $7.35.

FIT analyst rating is Hold.

Analysis

4. FIT buy or sell? What is FIT Finny Score?

#{finnyScore:33}Our quantitative analysis shows 3 reasons to buy and 6 reasons to sell FIT, resulting in Finny Score of 33.

5. What are the reasons to buy FIT? Why should I buy FIT stock?

Here are the reasons to buy FIT stock:

  • Fitbit is a global brand with a first-mover advantage and remains one of the leading providers of wearable fitness trackers. Being one of the first to market these devices, the company has been able to build a knowledge base about users’ fitness habits and demand for health monitoring devices. This, along with a concerted brand building effort, innovative new products and improved distribution has led to an increasingly loyal customer base.
  • Fitbit is also riding a couple of secular growth trends. This includes a trend toward better health and fitness behavior noticed among consumers. Another is an economic trend where consumers are increasingly eager to assume responsibility for their healthcare and are willing to pay directly for products that help them monitor their health.
  • Fitbit is seeing strong international growth. From the outset, it has taken a local approach to global expansion with the goal of becoming a household name in all the countries it serves. The company has entered India through Amazon and Reliance distribution systems, and is now trying to partner with local distributors to target mom-and-pop outfits.
  • However, retail is not Fitbit’s only growth engine. The company has made a lot of progress on the corporate wellness front as well, selling fitness trackers and software subscriptions to employers as part of their corporate wellness programs. It has also done a good job convincing companies, benefit brokers and employees about the importance of self-monitoring devices in bringing down healthcare costs.
  • Software product and social network development can drive future growth for Fitbit. Usual member social activity comprises linking to friends on the network, messaging friends, sharing data concerning health targets and metrics with other members, with fitness groups, with trainers, and with corporate wellness programs. The company also has a friend discovery feature in the challenges experience making it even easier to connect with friends on Fitbit and start step challenges.
  • The market for wearable fitness devices is growing. International Data Corp. expects the market for wearable devices to increase to 240.1 million units by 2021, at a compound annual growth rate (CAGR) of 18.2%. Of these, the largest segment, the watch category is expected to contribute 67% to total wearables shipment by 2021, increasing from its current level of 56.9%.
  • Fitbit is currently working on a turnaround strategy. The company underwent an executive shakeup in March aimed mainly at turning around its ailing fortunes. Chief business officer, Woody Scal and executive vice president, Interactive, Tim Roberts stepped down.
  • FIT Price/Sales ratio is 1.29, which is low compared to its industry peers’ P/S ratios. See FIT forward Price/Sales ratio chart.
  • FIT cash to debt ratio is 4.78, higher than the average industry (0.16) and sector (0.17) cash to debt ratio. See FIT cash to debt chart.
  • FIT Enterprise Value/Revenue multiple is 1.07, which is low compared to its industry peers’ Enterprise Value/Revenue multiples. See FIT Enterprise Value/Revenue chart.

6. What are the reasons to sell FIT? Why should I sell FIT stock?

Let's look at the reasons to sell FIT stock (i.e., the bear case):

  • After years of maintaining its leading position in the wearables market, Fitbit finally lost its ground to Xiaomi. According to the latest International Data Corporation (IDC) report, Xiaomi is tied at the top in terms of third-quarter 2017 shipment volumes, with it having shipped 3.6 million units. Fitbit has been pushed to the second position.
  • Fitbit’s growth has been slowing down with smartwatches outshining the fitness wearable category, influx of new wearables, lack of upgrades among existing users and lackluster growth in the Asia Pacific region. Despite the broad range of devices Fitbit provides at different price points, it has been facing tough competition at both the high- and low-end products. At the high end, there is Apple’s multi-functional Apple Watch, which renders Fitbit devices useless.
  • FIT stock price ($6.81) is close to the 52-week high ($6.93). Perhaps now is a good time to sell? See FIT price chart.
  • FIT quarterly revenue growth was -30.80%, lower than the industry and sector average revenue growth (2.22% and 1.51%, respectively). See FIT revenue growth chart.
  • FIT profitability is declining. The YoY profit margin change was -12.42 percentage points. See FIT profitability chart.
  • FIT Price/Book ratio is 3.34, which is high compared to its industry peers’ P/B ratios. See FIT forward Price/Book ratio chart.
  • FIT short share of float is 23.58%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See FIT short share of float chart.
  • FIT short interest (days to cover the shorts) ratio is 7.85. The stock garners more short interest than the average industry, sector or S&P 500 stock. See FIT short interest ratio chart.

Key Stats

7. What are FIT key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for FIT:

Metrics FIT
Price $6.34
Average Price Target / Upside $7.35 / 15.93%
Average Analyst Rating Hold
Forward Dividend Yield 0.00%
Industry Scientific & Technical Instruments
Sector Technology
Number of Employees 1,694
Market Cap $1.74B
Forward P/E Ratio -18.66
Price/Book Ratio 1.29
Revenue (TTM) $1.35B
YoY Quarterly Revenue Growth -30.80%
Profit Margin -16.35%

If you liked this analysis, check out Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

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