Can Anything Save Fitbit Inc (NYSE:FIT)?

Fitbit Inc FIT
Photo Credit: Global Panorama

Fitbit Inc (FIT) Information Technology – Electronic Equipment, Instruments | Reports August 2, After Market Closes

Key Takeaways

  • The Estimize consensus is calling for earnings per share of 13 cents on $588.96 million in revenue, slightly higher than the Wall Street consensus
  • The Fitbit Blaze and Alta have been successful in their short time on the market and will be available in China
  • Fitbit must prove that its products have a sustainable use case and can continue to move off the shelves in order to revitalize the beaten down stock
  • What are you expecting for FIT? Get your estimate in here!

Fitbit’s scheduled second quarter results next week is amongst a handful of reports coming from companies that have recently gone public. Many of these recently listed companies have struggled in their short histories on the market. In the past 12 months Box is down 30%, PartyCity 24%, and Etsy 46%. But Fitbit takes the cake, with shares down over 70% from a year earlier. Fitbit, like many of its peers, has suffered from decelerating revenue growth as consumers have more options in the wearables market. Early signs look as though these themes are persisting and will adversely impact Q2 earnings.

The Estimize consensus is calling for earnings per share of 13 cents, down 37% from the same period last year. That estimate has declined 59% since Fitbit’s last report in May. Revenue is anticipated to increase 46% to $588.96 million, continuing the trend down in sales growth.
The biggest problem for Fitbit has been proving that its products have a sustainable use case and can continue to move off the shelves. Last quarter saw the launch of the Fitbit Blaze and Alta which have so far performed remarkably well. Approximately 40% of user activations from those products were by users with prior devices and 20% were those who rejoined the Fitbit community after 3 months of being inactive. This is a remarkable achievement for a company that in the past suffered from limited upgrade demand.

In May of this year, Fitbit announced the availability of its two newest and most popular products, Fitbit Blaze and Alta, in China. Fitbit has also partnered with Alibaba to organize a health and wellness initiatives called “China is Getting Fit”. Its products will also be available on Alibaba’s third party platform, a move that is certain to drive sales. China has a wealth of resources and consumers that Fitbit should be able to leverage for its success.

As more competition emerges in the wearable space, Fitbit will need to ramp up its efforts to stay relevant. At the moment the industry has a handful of players including Apple, Garmin, Samsung and Under Armour. Despite how beaten down Fitbit has been in the past year, it will only take one strong quarter to right the ship.
Do you think FIT can beat estimates? There is still time to get your estimate in here!

Photo Credit: Global Panorama