![]() Apple has huge customer mindshare and an unrivaled brand generally.Īpple's smartwatch gets better Amazon reviews than even the new Fitbit lines. While Fitbit got going in the wearables market well before Apple, it's not certain customers will be loyal to Fitbit. Kindle was there first, built a strong brand, has a sizable ecosystem, and yet it still vastly trails the iPad in sales. Similarly, the Kindle was (is) arguably a better e-reader than Apple's iPad. But once the iPod launched, it was pretty much lights out for everyone else. Did Apple make the first nice MP3 player? No. Apple is rarely the first mover, but once it launches, competitors better take cover. Fitbit has found a bunch of early adopters who love the product, but it's far from certain that the mainstream consumer will want to do anything more than try Fitbit once and quit using it after a short while.Īpple Provides Strong Competition : Fitbit, like many disruptive consumer tech companies, has to face off with the Apple ( AAPL ) menace. Also, almost 40% of Fitbit's sales occur in the holiday quarter. While many consumers are eager to buy one Fitbit product, it's not so clear that there will be much of a repeat market. The company admits that half of its customers stop using their product after a year, and another 40% drop off in the subsequent year. In Fitbit's case, there are troubling signs. A rollerblading stock was a high-flier at one point. Several of these were story stocks on Wall Street for a time. We'll have to wait for a quarter or two to see if the glass is actually half full or empty.įitbit Could Be A Fad : The fitness industry, for whatever reason, is very prone to short-lived bursts of enthusiasm. So for the time being, you can look at either the bright or dark side of the recent product launches. It also says there are rumors about that Fitbit is cutting production levels. It claims that various major American retailers have "inflated" Fitbit inventory levels. BlueFin cut its 2016 unit sales and revenue guidance. Last week, BlueFin Research addressed the positive Blaze launch and raised questions. Launch May Not Actually Be Strong : While the above point about strong initial sales is encouraging, on the flipside, it must be mentioned that it appears the strong initial sales push was mostly from inventory build. The successful launch indicates that there is still a good deal of interest in the Fitbit concept and argues against the idea that the company has been riding a fad.Ĭheering the success, Fitbit stock took off on the good news. Amazon reviews for the products have them well ahead of previous Fitbit models. These figures were ahead of internal forecasts.īoth products have gotten excellent reviews. Successful Blaze Launch : As of the end of March, Fitbit announced that more than a million Fitbit Blaze smartwatches and 1 million Fitbit Alta wristband units had been sold in their first month on the market. Throwing a watch into the mix would allow them to move these products beyond just the phone ecosystem. Under Armour has already been buying fitness apps such as MapMyFitness and MyFitnessPal. The company has the funds and management flexibility to go on an acquisitive spree. The company is on a hot streak following the hugely successful Stephen Curry line of basketball shoes. Who might want to buy? The most logical takeout partner may well be Under Armour ( UA ). There's much less risk for a potential suitor at this price point. At $15, a buyer would only need to offer something in the low 20s to succeed. When FIT stock was at $40 or $50, a buyer had to have great confidence that a deal would work. Full year 2015 brought earnings of 77 cents per share, leaving the PE on the the stock at a reasonable 20.īuyout Target : With the plunge in FIT stock, it raises the probability that a bidder will come for the company. Unlike many of the hot tech stocks, Fitbit is strongly profitable on an earnings per share basis as well. 9 Stocks to Buy for Rip-Roaring Growth Potential.That's well into the high-quality tier of consumer tech products. ![]() The company earns a 48% gross margin and 19% operating margin on sales. By 2014, this was up to $745 million, and in 2015, things were into overdrive, with revenue soaring to $1.9 billion. In 2012, the company sold just $76 million of product. Following increasing doubts about the sustainability of the company's business model, FIT stock suffered cardiac arrest, slumping from $50 to $12.Įxplosive Growth : Fitbit is the sort of massive growth story that gets Wall Street most excited. Since then, it's seen a drastic change in the health of the company's shares. ![]() FIT stock surged following the IPO, rising to has high as $51 per share last summer. ![]()
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