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Barclays: Fitbit Is The Fastest-Growing Consumer Company In The World

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Barclays: Fitbit Is The Fastest-Growing Consumer Company In The World
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  • Shares of Fitbit Inc (NYSE: FIT) have been volatile in 2015 and are down 6 percent year-to-date.
  • Barclays’ Matthew McClintock upgraded the rating on the company from Equal-Weight to Overweight, while maintaining a price target of $49.
  • Fitbit is poised for robust growth driven by strong holiday sales and its potential networking effect in 2016, McClintock stated.

Fitbit’s shares have declined 26 percent over the past 30 days, versus a 1.2 percent increase in the S&P 500, analyst Mathew McClintock mentioned, while adding that the decline was unjustified.

McClintock believes that there are meaningful catalysts including the holiday season in 2015, CES, new product launches, new corporate wellness deals and margin improvement. In contrast, headwinds are expected to be minimal.

“Considering that FIT is the fastest-growing meaningful consumer company in the world at 140%+ revenue y/y in 2015 (in a world lacking true growth stories), we believe the current valuation levels are just too compelling to ignore,” the Barclays report stated.

Fitbit is expected to post meaningful sales upside from its holiday strength, McClintock said. He added that the potential networking effect benefit in 2016 from user growth related to these sales may also act as a catalyst.

The company’s revenue growth accelerated in 2Q15 and 3Q15 relative to 2Q14 and 3Q14. Moreover, Fitbit’s market share increased from 58 percent in 2013 to 68 percent in 2014 and 88 percent in 3Q15.

Latest Ratings for FIT

DateFirmActionFromTo
Dec 2016Deutsche BankDowngradesBuyHold
Nov 2016Pacific CrestUpgradesUnderweightSector Weight
Nov 2016BarclaysDowngradesOverweightEqual-Weight

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