Fitbit, the first superstar of wearable tech, has wowed Wall Street. But rivals are just a step behind
Fitbit Inc., the company that straps a conscience to your wrist, is a stock that's moving even faster than its users. Shares of the wearable technology pioneer have doubled since going public in June — raising the question of just how big a market there really is for devices that nag you to walk more and eat less.
The great
Fitbit dominates the activity-tracker market. Its lineup of six gadgets, with names such as Charge and Surge, monitor key fitness indicators such as how many steps you take, stairs you climb or calories you consume. The company's revenue almost tripled last year to $745-million (U.S.).
The good
Several Wall Street analysts love the concept. Analysts at Piper Jaffray compare Fitbit to consumer sensations such as GoPro and Under Armour, while their counterparts at Stifel gush over the "megatrend" of technology as health helper.
The not-so-good
This is one expensive stock. It trades for more than 70 times estimated earnings for 2015. The price only makes sense if you think the company's sales will keep growing at a breakneck pace.
The bad
Rivals such as Jawbone, Garmin and Misfit are already well established, and the new Apple Watch doubles as a fitness tracker. Samsung, Microsoft and Google are also in the fray.
Bottom line
It's unclear how Fitbit can prevent rivals from making inroBattle of the wrist Fitbit, the first superstar of wearable tech, has wowed Wall Street. But rivals are just a step behind Fitbit Inc., the company that straps a conscience to your wrist, is a stock that's moving even faster than its users. Shares of the wearable technology pioneer have doubled since going public in June–raising the question of just how big a market there really is for devices that nag you to walk more and eat less.
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