Another Reason Fitbit Is Up Today: PacCrest Bullishness

Pacific Crest Securities raised its first quarter, second quarter and full year earnings and sales view of Fitbit Inc FIT above Street estimates on strong demand for Alta and Blaze, the company's two-new products. Analyst Brad Erickson increased first quarter profit view to $0.09 from $0.02 and sales forecast to $505.9 million from $437.5 million. For the second quarter, Erickson hiked his EPS view to $0.30 from $0.28 and sales estimate to $555.3 million from $510.2 million. For the full year, the analyst raised EPS estimate to $1.21 from $1.11 and revenue estimate to $2.587 billion from $2.449 billion. Street expects earnings of $0.02 a share on revenue of $432.66 million for the first quarter. The consensus view for the second quarter stands at $0.26 and $531.92 million for EPS and revenue respectively. For the full year, the Street sees earnings of $1.12 a share on revenue of $2.44 billion. Erickson's checks in the United States showed a strong demand for Fitbit's two most recently launched new products, Alta and Blaze. Blaze hit the stores on Feb.27, while Alta entered the market on March 11. The analyst said he expects about 1.3 million Blaze devices have been sold-through in the first quarter, while Alta's estimated sales stands at roughly 600,000 to 700,000. On the ASP front, "We expect unit sales to grow at a two-year compound annual growth rate (CAGR) of 17% through 2017, with average selling prices (ASPs) increasing slightly in 2016 on broader product portfolio and then declining slightly in 2017." However, the analyst maintained his Sector Weight rating saying "..we remain more circumspect over the medium to longer term given poor user category trends, lack of sensor differentiation opportunities and rapidly decelerating growth rates portending potential for market saturation." Shares of Fitbit surged 12.54 percent to $17.05.