Buy FitBit? Raymond James Upgrades Stock, Says Now Makes 'Good Trade'

• Fitbit Inc FIT shares have followed a downward trajectory over the past six months, and have lost 62 percent since July 22.
• Raymond James’ Tavis C. McCourt upgraded the rating for the company from Market Perform to Outperform, while establishing a price target of $25.
• Positive channel check data, attractive valuation and expectations of new product launches through 2016 call for the upgrade in rating, McCourt stated.

Fears of activity trackers and smartwatches being merely a fad appear overblown. Analyst Tavis McCourt said that the December consumer survey data indicated that there is still a large gap between those who intend to own a fitness band or smartwatch and those who already own one, suggesting that this market has room to grow.

Checks also indicated that Fitbit continues to dominate purchase intentions. “We also believe in the near term, sell through and market share trend remain strong,” McCourt wrote.

The company has announced the launch of the Fitbit Blaze in March. The analyst expects the sales to be healthy, and believes that this would result in “significant peripheral sales for Fitbit through different watch brands.” He added that the company could launch additional devices in year 1-2, and these devices could be higher-end fitness watches.

“In sum, FIT does not appear to be making the mistake that GoPro made by having limited new innovation in the year after its IPO,” the Raymond James report noted.