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3 Areas In Which Fitbit Showed Encouraging Progress

3 Areas In Which Fitbit Showed Encouraging Progress

Trip Chowdhry, an analyst with Global Equities Research, suggested Fitbit Inc (NYSE: FIT)'s investors take their profits on the health and fitness company back in 2015. The analyst's call was spot-on as the stock peaked above $50 per share that year and steadily declined to an all-time low of $5.31 on March 27 of this year.

But Fitbit's stock gained more than 13 percent on Thursday after the company's first-quarter earnings report impressed investors and some of Wall Street's top analysts. Oppenheimer's Andrew Uerkwitz maintains an Outperform rating on Fitbit's stock with an $8 price target after the earnings report.

According to Uerkwitz, Fitbit's revenue and overall performance in the quarter was mostly in-line with expectations. Moreover, the company's hardware unit was a mixed bag as the Flex 2 is still plagued with high inventory levels but new product introductions are on track to be released.

3 Encouraging Signs

Looking forward, Uerkwitz stated that he is "encouraged" by Fitbit's progress in three key areas that are vital to its growth, including: 1) simplification of its product portfolio, 2) a focus on "feature-rich" devices, and 3) a clear digital health strategy.

Bottom line, the analyst further noted that Fitbit's reiteration of its yearly guidance bodes well for its strategy and the stock's outlook. But Uerkwitz did acknowledge that Fitbit's positive quarter "doesn't make amends" but it is nevertheless a "good start."

At time of publication, shares of Fitbit were up 11.97 percent at $6.36.

Related Links:

Pro: Top Technology Tips Include Industry Juggernauts And Struggling Fitbit

Chowdhry: Fitbit Is A Piece Of Junk

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