Bidness ETC - Is Fitbit Following GoPro's Footsteps?

Fitbit has growth potential that can make them sail swiftly in the long run.

Fitbit Inc. has become a favorite stock of several investors whose shares have now experienced a 50 percent surge when they traded on the first day. Many anticipate that the company has the potential to become the next GoPro Inc. the action camera giant considering how the company’s stocks have been performing.

Fitbit in a short span of time has intrigued its audience. The company is known for producing fitness gadgets that are used to keep a track of user activity like food, health habits, weight etc. that will help users to improve their health.

The company was established in FY07 and since then it has been growing significantly. In FY14, the company recorded a net income of $131.8 million that has helped them offset a loss of $51.6 million in FY13; moreover Fitbit’s revenue has also improved substantially having an impressive growth trajectory. It has been “recorded at $745.4 million in 2014, a growth of 175% from $271.1 million in 2013.”

The market cap for the company is $6.69 billion along with the stock price to be $32.5. However, GoPro resides at $7.8 billion. Fitbit at this point needs to be consistent with its service since it has to face several major competitors that are extremely well established like Samsung Group, Apple Inc., and Microsoft Corporation etc. The reason why these firms are a massive threat to the integrity of Fitbit is that these organizations have better infrastructures, facilities, brand image that Fitbit lacks currently.

It is mere injustice to compare Fitbit with industry giants but it needs to be judged on another threshold that governs its standing. Fitbit has a strong hardware offering along with a strong data platform that ensures business to business collaboration.

As reported, after the IPO for the company was being priced at $2, which is commendable , a jump of $32.50 is pretty great considering the limited resources they have and keeping in mind the constant flux of new products, researches and innovations the company often faces. The company has an impressing $7billion market cap from the end of the tech wearable market being about $20 billion.

GoPro when it was launched observed an extremely positive response and its stocks saw a 100 percent increase in the first week only. This is merely because hardware products tend to penetrate at a faster pace making them highly sought after.

Hence in a nutshell, Fitbit does have potential and can follow the trajectory of GoPro all it needs to do is consistently offer top notch services.