Analyst Nick McKay from Wedbush previewed Fitbit Inc (NYSE:FIT) ahead of its second-quarter earnings that will be released tomorrow after closing. The analyst is expecting to see a positive report, as “consumer demand appeared to remain brisk throughout Q2.”

McKay estimates to see revenue of $595 million and EPS of $0.13. His research shows that demand is robust for several of Fitbit’s products including the Alta, Blaze and Charge HR. He also anticipates “strong sell-through to translate into more sell-in.”

Fitbit has predicted a 14% QoQ top-line decline for this quarter. If this is the case, Fitbit will have an easier job beating expectations for the third quarter, especially if Fitbit’s new products launch in time for the third quarter. McKay believes that Fitbit will release a lower ASP, $100 or above, and a higher ASP, $200 or above. He doesn’t think that the products have to have a high-profile new feature to sell well.

The analyst believes that commoditization and competition concerns are overstated. Fitbit still controls the market, despite facing lower-price competitors, because of the quality of its products and the network effect.

McKay maintained his Outperform rating with a price target of $18, marking a 32% increase from current levels.

As usual, we recommend taking analyst notes with a grain of salt. They are often successful in moving the stock price, but you always need to take things into perspective. According to TipRanks, McKay has a yearly average loss of 28% and a 14% success rate. The analyst has a 1.6% average loss when recommending FIT, and is ranked #3,900 out of 4,085 analysts.

TipRanks shows that out of the 17 analysts who rated FIT in the last 3 months, 65% gave a Buy rating, and 35% gave a Hold. The average 12-month price target for the stock is $20.23, marking a 48.10% upside from current levels.

Read More: Baird Analyst Worries About Slowing Demand For Fitbit Inc (FIT); Here’s Why »