Sold at over 45,000 retail locations globally, the seven products that Fitbit offers (3 of the 7 not being a wrist wearable) are well distributed around the world. Having fair pricing entry for the average consumer ranging from $60 to $250, Fitbit has clearly been on a successful mission to provide active monitoring of one's health.
The products are simple, seamless to use, and most importantly can change your life if actively used - 'Now that's worth investing in'. And I don't just mean the product. The stock has been up 50% since its IPO in June, although analyst have said it the stock is overvalued.
Fitbit's core focus is on the future of wearable technology that will easily monitors your health in an active and fun way, incorporating healthcare and technology to improve the quality of life around the world.
From 2013 to 2014 Fitbit's revenue increased by $474M or 175%, year over year. The company may not be able to provide the same year over year returns, however, the company has come a long way in terms of scaling the business and maintaining sales growth. As health becomes more of a major priority to consumers, Fitbit will assist in contributing to the world's well being.
FIT is truly a unique company. Although the products do not hold any real proprietary IP, the company has been able to grab a large share of the wearable tech market due to their management team having a great corporate process in place along with having a strong brand with high quality products. The Apple watch (AAPL) which is considered to be the biggest threat to FIT has not done as well in sales compared to other recent product launches. Distribution of the Apple watch has been limited to Apple retailers, which will change in August as Apple announced selling the watch at 100 Best Buy locations (BBY) and plans to be in 200 stores by the end of the year. Analysts are wondering if that will decrease current Fitbit sales as the two products will share shelf space. Most doubt it due to the watches' different functionalities. Only time will tell.
Fitbit will report Q2 earnings on August 5th, stay tune for my coverage from Carestocks.
At the time of this commentary Michael Ojo, his family and/or clients of Golden Door Asset Management were LONG FitBit Inc. (FIT) — although positions can change at any time.
Michael Ojo is the Account Manager of Golden Door Asset Management, LLC, a registered investment advisor specializing in individual and high net worth individual private wealth management. For more information on investing with Golden Door Asset Management, LLC please visit our website,www.goldendoorasset.com. Golden Door Asset Management, LLC is a New Jersey LLC, with its principal office located in Manalapan, NJ.
Michael Ojo is also the publisher of CareStocks, a newsletter focusing in on healthcare services, medical equipment, technology and real estate stocks. More information to the newsletter can be found at www.carestocks.com.
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