What to Expect From the First Fitbit Earnings Report

Consumer Electronics

Published: August 4, 2015 1:50 pm

Last Updated: August 4, 2015 1:51 pm

Fitbit Inc. (NYSE: FIT) is scheduled to report its second-quarter financial results after the markets close Wednesday. This will be the first quarter that Fitbit will report as a public company. The consensus estimates from Thomson Reuters call for $0.08 in earnings per share (EPS) on $319.45 million.

Fitbit had 85% of the U.S. market for fitness wristbands in the first quarter of this year and about a third of the global market for the devices. Research firm IDC has said that the wearable device market is set to grow from 45.7 million in 2014 to 126.1 million by 2019. Of the total market in 2015, nearly 90% will be wrist-worn wearables, or about 41 million devices.

Since July 1, Fitbit stock has traded right around $42 a share, after climbing from around $33 on June 29. Shares climbed again in both mid- and late-July to the $45 to $49 level. The IPO underwriters had good things to say about the company when the quiet period ended, especially considering the beating that Apple has taken over reportedly weak sales of the Apple Watch.

For its IPO, Fitbit originally priced at $20.00, but it entered the market well above at $30.40 on June 18, 2015. On its first day of trading, roughly 52.1 million shares moved. The stock closed at $29.68 on its first day. What was especially exciting about the offering was that shares rose over 50% after its debut and that all of its 38 million shares had been traded in just its first 90 minutes of trading.

The fitness-tracking device maker was said to be only in the early growth stages of its product cycle. Other drivers shown were a move toward the international market, as well as adoption in the corporate wellness segment. Both are deemed to be even in the earlier stages than the U.S. consumer segment.

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RBC sees revenue growing more than 80% in 2015 and almost 30% in 2016. These rates of growth are expected to help Fitbit grow into a very premium market valuation.

Shares of Fitbit were up 0.8% at $49.33 on Tuesday afternoon. The stock has a consensus analyst price target of $46.45 and a post-IPO trading range of $29.50 to $50.99.

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