Morgan Stanley, SunTrust Initiate Fitbit With Positive Notes

Analysts at Morgan Stanley and SunTrust Robinson Humphrey initiated coverage on Fitbit Inc FIT with Equal-Weight and Buy ratings, respectively.

Each firm was optimistic of Fitbit's fundamentals and potential for international growth; however, the two differed in their expectations of what having the elephant in the room - Apple Inc. AAPL - would mean.

Katy Huberty at Morgan Stanley said that "we can't ignore Apple, though overlap limited near-term." The analyst also argued that Apple was too dominant a player in technology to "not assume some share loss" in the future.

SunTrust's Bob Peck seemingly disagreed, at least slightly. He argued that "despite Apple's entry into the wearable space, Fitbit has the highest brand recall and the highest conversion of awareness to purchase decision of all brands." But, perhaps more importantly, Peck said that "users cannot rely on devices that need to be charged every night" for two of the most popular features: heart rate and sleep monitoring.

Related Link: RBC: Buy Fitbit, It's 'Not A Fad'

Both SunTrust and Morgan Stanley are bullish on Fitbit's fundamentals. The company has a "strong revenue growth rate" of 150 percent with "solid growth margins," according to Peck. Peck also reiterated that the company was "growing profitably" with $140 million in expected net income in 2015.

Morgan Stanley pointed to Fitbit's opportunity in "largely untapped corporate and international markets" and "significant R&D investment." That skews the risk to the "upside" in 2016.

Since its IPO less than a month ago, Fitbit has added nearly 42 percent, rising from around $30 per share to more than $42 per share on Friday. The stock was indicated 1.7 percent higher in pre-market trading. SunTrust's $50 price target would represent a 18.5 percent premium on Friday's closing price.