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Fitbit shares are trading near their 52-week low. However, a strong quarterly report and product lineup suggest that the company’s stock could be slated for a turnaround.
Fitbit (NYSE:FIT) has had a challenging time as of late. Once the darling of the wearable tech scene, share prices have fallen a whopping 58.41 percent over the past six months. However, by some accounts, Fitbit’s downward slide is about to turn around.
For his part, John Divine of InvestorPlace believes that Fitbit shares have bottomed, and that the company’s new smartwatch, the Fitbit Blaze, “will light a fire under FIT shares.”
Share prices for the company saw a downward shift in late February, following the company’s release of outlooks for the current quarter and full year. It’s stock fell 20.82 percent after earnings estimates for the company were significantly below Wall Street’s expectations.
However, there was also good news in these reports, which some say that the market failed to recognize. According to Markets Stream, the company’s fourth-quarter earnings rose to $64.2 million, or 26 cents a share. This was up from $39.2 million, or 19 cents a share, one year ago. Meanwhile, revenues for the company nearly doubled, moving from $370.2 million to $711.6 million in the course of a year.
Strong product lineup
Furthermore, the company has a strong product lineup that causes customers to keep returning to the company. Take the aforementioned Fitbit Blaze, for example.
According to James Stables’ review of the product on Wearables, the watch is “the best tracker the company has produced to date.” He elaborates: “it’s a pretty complete set of fitness metrics that will please anyone shopping for a top end activity tracker, and there are few more advanced than the blaze at this stage.”
These strengths mean that the watch, which was intended to eat into Apple’s (NASDAQ:AAPL) domination of the smartwatch market, should have no trouble attracting buyers. There are other strengths as well: the device does a great job of integrating fitness tracking, music, photographs and other forms of media. Furthermore, a five-day battery life helps to offset the slightly awkward design for charging the watch.
The modest price point should also help: at two hundred dollars, it’s a much more affordable option than Apple’s watch.
But, as Stables’ review suggests, the watch is no gamechanger. The lack of GPS connectivity has proved a sticking point with reviewers. Joanna Sert, of the Wall Street Journal, also honed in on this limitation.
Market view
Currently, shares of Fitbit are trading at $13.89 percent. And over the past month, the company’s share price has slipped 1.49 percent. However, in the past five days alone, the company’s stock has popped back, rising 5.29 percent.
Whether this moment presents a buying opportunity, or a sign that Fitbit stock has run its course remains to be seen. However, it’s clear that despite the company’s drop in share price in recent months, a number of market watchers are still positive on the company.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.