I added them to the 1YPEG spreadsheet. Here are some highlights:
1YPEG: .12
YoY Rev Growth: 149%
YoY Earnings Growth: 95%
TTM non-GAAP PE: 11.3
Current Share Price: 12.13
52-week high: 51.90
Thanks, Mr Market – this is looking super cheap now! Excellent earnings Monday and the stock plummeted on guidance. (They’re guiding to beat YoY quarter revenue by 25-30%. “Not good enough!” - Wall Street)
I visited Best Buy recently and they had a huge FitBit display. I know several people who got one for Christmas. With the health initiatives a big part of their strategy, I think they will continue to grow rapidly.
The high in August was probably due to some irrational exuberance, as tends to happen with these tech IPOs. In fact, it wasn’t even on my radar until it dropped below $20/share in January. I started looking into it in the last couple weeks, realizing it was starting to look cheap. When earnings were announced this Monday, the guidance reduction was enough to make it 15% cheaper yesterday morning, so I took a small position. Today it’s down again and I doubled my position. In my opinion this valuation is just silly.
FIT looks interesting, however I am concerned that it may be only a good value and not offer good long-term prospects.
I see a lot of new competition to Fitbit devices and nothing significant to set them apart from each other. Fitbit does look to have an edge in brand name recognition because they got in early however I don’t see a compelling reason that will last.
Smart watches also seem a significant risk. I think it is too early to say how popular smart watches will become. If smart watch use becomes widespread they could potentially make Fitbit devices irrelevant.
My personal bias is also to always hesitate at products which could be temporary fads. This has me wondering if Fitbit device popularity will naturally erode after the initial excitement wears off.
All these concerns aside, I do agree that today’s price looks like a good value. I’m just concerned about what may happen long-term.
Any thoughts? What is their edge over the competition?
My family has 3 Fitbit users and we all like them. A LOT of people I know have them and I see them everywhere.
I will continue to use them until/unless Apple releases a health tracker (similar to the Fitbit) rather than the Apple Watch. I don’t want the Apple Watch for all the “other” stuff it does, but if they release a product with just the health tracker aspects, I would switch from Fitbit to that option (assuming they do a decent job with it).
To me, that is the risk of a Fitbit investment.
I think the future of the health tracker device is huge, and if Apple enters it, they will win it (at least the profitable part of it) as they have with the music player, smart phone, tablet, and smart watch markets.
No problem, Saul calls me Noodles, too, not sure why.
I don’t have ANY reason to believe Apple would release a separate health tracker product, I just WISH they would. I think it would be a good complement to the Watch for the physically active that like the tracker features but don’t want the expense or additional stuff that comes with the watch (I also don’t care for the current design).
I don’t know many people that want/like the watch, but a LOT that like/want fitness trackers. Personally, I would like one that is waterproof that I can wear and would track swimming.
So I have no inside info that suggests Apple would release something like this, I just hope they do, as I think they would do it best.
I think Apple realizes that fitness tracking is going to be big, thus the Health app they provide that is pretty underutilized at this time. I’m hoping they plan on future health tracking advances. And if they do go that route, I think Fitbit (and others) will have problems.
Potentially a slim chance, yes, but enough to keep me out of Fitbit for now.
Any thoughts? What is their edge over the competition?
In my opinion, one big strength is that they can compete on price. To me that seems to allay a lot of the threat of Apple or someone else coming in and competing directly with a similar product. Does Apple really want to make a $50-$100 band? Why? If so, can they do so cheaper and better than Fitbit?
In fact, it looks like any number of tech company charts, post IPO. First, the IPO is priced too high, then you get the bump from exuberant early investors, then the stock price sinks as early investors exit, and pre-IPO holders take profits.
Not sure there is any predictive value here. Call me in two years.
I’ve been thinking a lot about Fitbit this month. I’ve added to my position twice (including today), and it’s now become one of my largest holdings. In general, I believe Fitbit is becoming more and more ingrained in our culture, and no one talks as much of the competition. Still, much has been made of the threats of other players entering, and I think this has kept the stock down. But if the company’s outstanding growth continues, I don’t see how it can be kept down for long.
I have also been considering a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), and as I mentioned, most of the threats are well known. But think about the Opportunities. Businesses and schools are partnering with Fitbit. So is Amazon. The company is taking on a very holistic view of their place in the wellness community – that’s one of my main takeaways from their last conference call. I believe they have tons of market yet to conquer – they “only” sold about 21M devices last year – think where they could go from there (I’m not trying to say they will sell billions, but hundreds of millions worldwide seems perfectly feasible to me).
Anyway, just some more thoughts. As always, do your own analysis, but here are the key numbers I’m looking at:
I was looking at FIT the other day and one thing gave me the heebee geebees, the shares outstanding relative to the float. There are 138 million shares outstanding and a float of 22 million shares. That is a lot of shares held by insiders which flood the market or even slowly trickle out over time to keep the price down. It is not a show stopper for me but it is something that I am going to look a little deeper into before making a buying decision.
Yes, I know Yahoo! is not the most reliable source of information. When I see something unusual, such as these share count numbers, I go to company’s regulatory filings. I have not had time to do so for FIT yet.
I think the biggest problem with FIT is the high percentage of shares that are shorted.
There is something wrong with yahoo finance numbers there. It states 86% of the float shares are shorted, but lists 31M shares shorted with 22M shares of float.
I looked it up on TD Ameritrade and FIT had 233% of float shares shorted on 2/29/2016!
I don’t think a long position in FIT is going to be allowed to be profitable until the big institutions are done making their money on the short side.
If the company keeps growing their earnings this could be a great one to keep monitoring for the turn around.
