Fitbit (FIT) Stock Initiated with Outperform: Wedbush

Smartwatch

In a report published Thursday, Wedbush analysts initiated coverage on Fitbit stock with an ‘Outperform’ rating and price target of $18 per share, which represents an expected 27.7% upside to the stock’s Wednesday closing price of $14.10.

The firm notes that although the San Francisco-based health and fitness device maker is already the fitness tracker market leader, they see a long runway for growth. Further, while Wedbush sees the pace of innovation slowing, it believes FIT shares are currently undervalued given a long runway remaining from an installed base perspective.

Price Action

Fitbit Inc. (FIT) edged higher in early trading following the report. Shares have traded today between $14.09 and $14.22, giving it a market cap of roughly $3.6 billion. The stock, which has been fluctuating between $11.91 to $51.90 over the last 52 weeks, traded at almost $52 on August 5, 2015.

Valuation

Beyond the recent decline of share prices, the company’s metrics appear healthy as fundamentally FIT shows the following financial data:

  • $791.71 million in cash in most recent quarter
  • $1.52 billion t-12 total assets
  • $981.45 million total equity
  • $2.03 billion t-12 revenue
  • $116.54 million annual net income
  • $78.59 million free cash flow

On valuation measures, Fitbit Inc. shares have a T-12 price/sales ratio of 1.54 and a price/book for the same period of 3.08. EPS is $0.38. The name has a median Street price target of $21.00 with a high target of $32.00. Currently there are 10 analysts that rate FIT a ‘Buy’, 10 rate it a ‘Hold’. No analyst rates it a ‘Sell’.

In terms of share statistics, Fitbit Inc. has a total of 155.20 million shares outstanding, with 22.41% held by insiders and 62.00% held by institutions. The stock’s short interest currently stands at 29.25%, bringing the total number of shares sold short to 36.03 million.

Fitbit Inc. shares are currently changing hands at $14.22. Ticker is down 52.35% year-to-date.

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