Oppenheimer analyst Andrew Uerkwitz weighs in on wearables maker Fitbit Inc (NYSE:FIT), after hosting the company’s VP of IR Tom Hudson at the 17th Annual Oppenheimer Consumer Conference where discussion centered on the wearables market, new products, and digital health.
Uerkwitz wrote, “Near term, Mr. Hudson pointed us to partnership announcements to gauge digital health traction, but initial revenue opportunities will be hardware-only. We think investors will wait for consistent execution from the Fitbit team amid some uncertainty on the future direction of the wearables market. Other items of note, FIT appears to be tightening up corporate structure, a lack of confidence in new products continues to permeate and note our estimates have FIT exiting this big cash burn 2017 with still nearly half its market cap in cash.”
The analyst continued, “FIT sees recent Apple success and focus on health +wellness as validation of FIT’s positioning and of the market opportunity for fullfeatured devices, but noted this is creating a weaker demand environment for lowend products. This has dictated a more promotional environment for FIT lower end products as inventory management has been a near-term focus.”
Overall, Uerkwitz is bullish on Fitbit shares, reiterating an Outperform rating with a price target of $8.00, which implies an upside of 57% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Andrew Uerkwitz has a yearly average return of 7.5% and a 52% success rate. Uerkwitz has a -36.5% average return when recommending FIT, and is ranked #693 out of 4583 analysts.
Out of the seven analysts polled by TipRanks (in the past three months), three rate Fitbit stock a Buy, three rate the stock a Hold, and only one recommend to Sell. With a return potential of 43%, the stock’s consensus target price stands at $7.40.