Is Fitbit Stock A Buy?

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Fitbit Inc FIT, the wearable technology devices company, has seen its stock face immense pressure since its IPO in June 2015. Whilst their health tracking devices have gained popularity over the past few years, rising competition from the likes of Apple, Nike and Garmin, threaten to diminish Fitbit’s market share.

After falling about 59% below its IPO price and reaching a bottom of $11.65, the stock has come to attractive valuations. In fact, some long- term bulls have already picked up the stock, and it is now trading at $14.78. Regardless of the recent rally, the stock is still trading at a P/E ratio of 29.1, which is an attractive level for a young technology company with future growth potential.

Technical Indicators

Technical indicators are also favourable for the stock, at least at the moment. The monthly Williams %R for the stock is currently -92.25. A reading between -80 and -100 usually indicates strongly oversold conditions, so from this perspective Fitbit stock has been heavily oversold. This could be an encouraging sign to traders looking to pick up the stock.

The chart below shows the recent crossover of the 20-day and 30-day moving averages over the 50-day moving average, signalling that the bullish momentum will to continue.
Moving Averages Crossover

The author is currently long Fitbit.

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Posted In: Long IdeasTechTrading Ideas
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