FIT went public last month and many were surprised to find that the company is actually making money. In this day when many tech IPO’s are from companies that have yet to make a dollar, Fitbit is profitable as long as you are willing to use creative accounting. Nevertheless, it seems that investors have embraced this company and bid the stock up more than 60% from its opening price in June.
It seems that Fitbit has really started to separate itself from the rest of the pack of wearables. There are lots of competitors but there is no doubt that Fitbit is the leader. As proof of that we now have Jawbone suing them and that usually only happens when the #2 or #3 company sees they are falling behind.
Fitbit doesn’t try to do too much like perhaps the Apple Watch did. They put out a few really great products that do what they are supposed to do and cater to health enthusiasts who want something small and convenient on their clothing or wrist. This is a very important point and a simple formula – their products focus on a few data points and stop there. You know what you are buying, you know exactly what the product will do, and it does it well. Simple.
Fitbit may get increased competition from Apple Watch and other competitors in the future but right now they are winning with that simple formula. As long as they can continue to laser focus on exactly what their customers want and deliver it to them at a reasonable price, they stand a good chance of continuing to grow. After all, you know your products are good when they are accepted to be sold in the Apple stores which they are.
Investors in FIT may want to wait for a market downturn or something else that causes the stock to come down. Right now it is a bit over heated and over hyped but once that pullback happens, Fitbit might continue to be a growth stock that is worth considering.