Analyst Nat Schindler of Merrill Lynch commented on Fitbit Inc (NYSE:FIT) after the wearable fitness device maker reported earnings that were ahead of expectations. The company reported 2Q revenues of $587 million, ahead of estimates of $578 million, due to unit sales growth of 28% YoY.

Sales in Fitbit’s U.S. market grew 42% while sales in Emerging Markets went up 150%. Its Asia-Pacific, or APAC, market didn’t fare as well and fell 54% YoY as “the company’s principal retailer in Australia shut down.” Taking out Australia, Fitbit’s APAC region grew by an impressive 98% YoY.

The loss of Fitbit’s Australian retailer also had an effect on its EBITDA. The company beat EBITDA expectations by $4 million, but it would have doubled guidance if it were not for its hit in Australia.

Fitbit left its full year guidance unchanged at $2.55 billion, which gives the company more “cushion for the all-important Q4.”

Even though Fitbit continues to beat expectations, 33% of its “float” is short. The analyst acknowledges that it is hard to predict demand for Fitbit’s fitness bands next year, but he does “expect Fitbit’s accelerating growth and high profitability to eventually wear down the overly bearish investor sentiment.”

Schindler reiterated his Buy rating with a lowered price target of $24, based on a more conservative 14x ’17E EPS.

According to TipRanks, the analyst has a yearly average loss of 2.8% and a 43% success rate. The analyst has a 3.9% average loss when recommending FIT, and is ranked #3,414 out of 4,071 analysts.

TipRanks shows that out of the 17 analysts who rated FIT in the last 3 months, 59% gave a Buy rating and 41% gave a Hold rating. The average 12-month price target for the stock is $20.63, marking a 38.18% upside from current levels.

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