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What Fitbit, Ambarella And Mobileye Had In Common At CES

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Pacific Crest analyst Brad Erickson had the chance to meet with management from Fitbit Inc (NYSE: FIT), Ambarella Inc (NASDAQ: AMBA) and Mobileye NV (NYSE: MBLY) this week at the CES conference in Las Vegas. Here’s a look at the key takeaways from those meetings.

Fitbit CEO Bill Zerella assured Erickson that the market overreacted by selling off the stock after the launch of the Blaze. He also believes both of the recent lawsuits against the company are similar to previous lawsuits and completely without merit.

Erickson sees consensus 2016 earnings estimates for Ambarella as significantly too low and believes that there is potential for multiple expansion for the stock as well. “We estimate drone margins are as much as 1,000 basis points above the corporate average and with drones accounting for as much as 20% of revenue in F2017, we believe there is significant opportunity for earnings upside,” he explains.

Erickson applauds Mobileye’s three large auto partnerships, but says that it’s difficult to assign a long-term value on a company in a new industry like automated vehicles. For now, Pacific Crest remains in “wait and see” mode regarding Mobileye.

The firm has Overweight ratings on Fitbit and Ambarella and a Sector Weight rating on Mobileye.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for FIT

DateFirmActionFromTo
Jan 2018Roth CapitalInitiates Coverage OnBuy
Dec 2017Stifel NicolausDowngradesHoldSell
Oct 2017Morgan StanleyMaintainsEqual-Weight

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