In a research report issued yesterday, Piper Jaffray analyst Erinn Murphy reiterated an Overweight rating on shares of Fitbit Inc (NYSE:FIT) and raised the price target from $52 to $60, which implies an upside of 34.5% from current levels. The increased price target comes in response to company’s second-quarter financial results, which were stellar, according to the analyst.
Murphy observed, “From our perspective, the space remains healthy, estimates will likely prove conservative and FIT is a name that should be bought on weakness this morning. Q2 sales were $400M, ahead of our $325M estimate and EPS was $0.21 vs. our $0.07 estimate. Q3 sales are forecasted in a range of $335-$365M well above our former $249M estimate and FY15 sales guidance is now for $1.6-$1.7B. We are pleased by the strong response to new product, improving supply chain dynamics & accelerating trends in EMEA & APAC which were up 300% and 290%, respectively.”
“We are raising our estimates as follows: our Q3 EPS moves from $0.05 to $0.09 and our FY15 EPS moves from $0.56 to $0.76. Our FY16 and FY17 EPS estimates move to $1.00 and $1.23, respectively. As estimates continue to move higher, we believe FIT will grow into its multiple and as such, we are reducing our multiple from 70x to 60x. That said, we are raising our PT from $52 to $60 assuming the shares trade at 60x our FY16 estimate. We estimate FY15 sales growth of 125% and EPS growth of over 60%.”, the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Erinn Murphy has a total average return of 6.1% and a 63.3% success rate. Murphy has a -3.9% average return when recommending FIT, and is ranked #755 out of 3728 analysts.