Fitbit (FIT) late Wednesday smashed Wall Street’s targets for the first quarter, but delivered mixed guidance for the current quarter that disappointed investors. Previously Fitbit Inc (NYSE:FIT) reported $0.35 earnings per share (EPS) for the quarter on 2/22/2016 After Market Close, beating the Zacks’ consensus estimate of $0.25 by $0.10 with surprise factor of 40.00%. Revenue is expected to be in the $565-585 million range, against the analysts’ $532.79 million projection.
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The maker of wearable fitness devices earned 10 cents a share excluding items on sales of $505.4 million. Analysts now estimate earnings of $0.26 per share and revenues of $532.79 million.
“The fact that we introduced the new Blaze and Alta in the last month of the quarter and they drove nearly 50 percent of our revenue is pretty remarkable”, Fitbit chief financial officer Bill Zerella noted on the earnings call. Tmall will also aim to assist Fitbit become one of the first 10 global brands within Tmall’s electronics category to achieve 10 million fans in Asia. The company revealed that it sold over one million Blaze devices in March, making it the best-selling smartwatch, even above Apple.
When you consider this information collectively, it seems criminal that shares are down 11% in afterhours, shares that were already down 42% this year. Based on the first quarter’s performance and momentum, we are confident about the remainder of the year, which is reflected in our increased guidance. Fitbit Inc provides fitness tracking devices, wearable devices, and the health and fitness industry. SunTrust reissued a buy rating and set a $48.00 target price on shares of Fitbit in a research report on Tuesday, January 5th. The share price has dropped -66.9% from its peak and so far in this year fell -41.94%.
You’d think that Fitbit shares would reflect the stupendous quarter, but Wall Street continues to trade FIT stock, shall we say, skeptically. One recent example was an integration with the Amazon Echo, in which users can ask with their voice how they are performing through their Fitbit devices.
Today’s FIT stock selloff is overdone, plain and simple.
A large surprise factor in either direction typically can lead to a significant swing in the stock price in the hours and days after the report.
For the full year, the company estimates earnings of $1.12 to $1.24 per share and revenues of $2.5 billion to $2.6 billion.
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That said, bears were in fact able to keep KORS stock depreciated long enough until same-store sales growth did in fact slow and margins declined.
