Fitbit: A Wise Investment Or On Its Way Out?

There is no question that the wearable technology market is set to continue gaining momentum in the coming years. However, whether fitness tracking pioneer Fitbit Inc FIT will be able to survive as the market evolves has become a polarizing topic.

The company is often hailed as a great investment, especially at its current valuation, but others view it as a rapidly deteriorating brand that is soon to go the way of the dodo.

The Case For Fitbit

Some analysts have upgraded their views on Fitbit in recent days, saying that the stock is sorely undervalued.

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So far this year, Fitbit's share price has lost 38.53 percent, as investors flee risky stocks in favor of safer assets. However, the company's low share price has brought out the bargain hunters, and many expect that the firm will continue as a market leader in the newly developing fitness tracking industry, making it a good buy at current prices. Jim Duffy of Stifel Nicolaus said he sees the firm's share price nearly doubling as adoption rates continue to climb.

It's true that Fitbit wristbands have attracted the attention of the general public, and since the fitness tracking industry is still in its infancy, there is a lot of room for growth. Fitbit is likely to continue attracting new users in the year to come as more people decide to try out the bands in an effort to get healthier.

Is It Enough?

Investors with an eye further into the future are skeptical. While Fitbit has been able to attract new users, the company has yet to prove that people would be willing to upgrade their devices in the years to come.

Similar to what has happened to GoPro Inc GPRO, many worry that Fitbit will become a passing fad, as other wearables like Apple Inc. AAPL's Apple Watch incorporate similar functionality. Many believe that the company won't be able to continue growing as the market matures, an important aspect to consider especially for those planning to hold on to the stock in the longer term.