Fitbit Stock: What Investors Should Know Ahead of Earnings Report

Fitbit stock

Fitbit (NYSE:FIT) is all set to report its fiscal first-quarter results on May 1, 2019, and thus investors will be eyeing Fitbit stock for signs of regaining its spark.

Fitbit Projects Moderate Growth

The company management gave a broad guidance sales range in Q1 2019 with revenue expected to grow between 1% and 8% compared to last year. The projections are a sign of uncertainty on how customers will respond to the company’s new products such as Versa LiteSmartwatch, Inspire, and the Inspire HR trackers.

In the past, Fitbit sales were uninspiring, with the company reporting falling year-over-year revenue for seven consecutive quarters, and in the Q3 and Q4, sales revenue declined 0.3% and 0.1% respectively. Based on previous performance, a 1% growth will be a tremendous step and hitting 8% would be considered a big leap.

Wall Street analysts have estimated that Fitbit will post a loss of $0.22 per share, down from $0.17 a share that the company posted last year, which doesn’t spell great news for Fitbit stock.

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Fitbit Sold 5.6 Million Wearables

In the Q4 2018, the company sold over 5.6 million devices, a 3% increase from the previous year, making it the second largest smartwatch manufacturer. Products launched within the last year generated 79% of total revenue.

James Park, the company CEO, stated in March that Fitbit is delivering high quality, affordable, and easy to use devices for people of all ages. The affordable Fitbit devices offer a solution to consumers who might be hesitant to purchase $1000 plus devices from Garmin, Apple, or Samsung.

For Q1 2019, Fitbit expects revenue to range between $250 million and $268 million, which is within Zacks’ Consensus Estimate of $259.9 million. Fitbit stock has a Zacks Rank #3 with an earnings ESP of 0.00%, which does not show a positive earnings surprise.

Fitbit stock has corrected over 22% from its late February peak price of $6.87. The stock is trading lower by 2.23% at $5.27 in the morning session on Tuesday.

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Featured image: DepositPhotos @ geoffgoldswain

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