Why This Noted Analyst Is Expecting A 'Solid' Q4 Report Out Of Fitbit

• Fitbit Inc FIT shares have lost 32 percent in the last three months, even after rising to a high of $40.80 on November 2.
• Piper Jaffray’s Erinn E. Murphy maintained an Overweight rating on the company, and a price target of $60.
• The company could deliver strong conversion throughout the holiday season, Murphy stated.

“As we have entered the final stretch of the holiday season we have seen increased promotional activity broadly speaking versus prior years,” analyst Erinn Murphy said. He added, however, that channel checks and Amazon price & rank analysis suggest that Fitbit’s discounting has been lower than its fitness tracker competitors as well as the entire consumer electronics space.

Despite modest discounting, the Amazon ranking has moved up significantly over the past three weeks, Murphy noted, adding that seven of the top ten items in the Amazon sports and fitness category were Fitbit products.

Despite a sluggish environment, Fitbit is expected to report strong Q4 results. “We continue to be buyers of FIT and have an upward bias to our Q4 estimate. We favor the set up on FIT over the next few months in particular,” the analyst wrote. He add that the company could have a strong product pipeline for 2016.