IB Net Payout Yields Model

Fitbit - Q4 Earnings

After reporting Q4 results, Fitbit (FIT) is down substantially. In not a huge surprise, the wearables company failed to satisfy the market with 2019 guidance after the stock had a big run up to nearly $7.

Q4 Results
  • Non-GAAP EPS of $0.14 beats by $0.07
  • Revenue of $571.2M (+0.1% Y/Y) beats by $1.85M

2019 Guidance
  • Revenue of $1.52B-$1.58B (1-4% growth, and vs. consensus for $1.57B
  • EBITDA of -$30M to break-even.
The Q1 guidance will be ignored for the purposes of reviewing Fitbit. A company with products focused on the holidays should get a lot more investor focus on the holiday numbers and limited focus on Q1.

Based on after-hours trading around $6, the stock has a market cap of ~$1.5 billion with sales estimates of a similar amount of 2019. On top of this figure, Fitbit has a cash balance of $723 million leaving an insanely low Enterprise Value of about 0.5x sales.

My view remains that Fitbit will eventually get a sales boost from a shift to the companies wearables being seen as medical devices. Until that time, load up on the stock below $6.

More commentary - WhoTrades

Disclosure: Long FIT. Please review the disclaimer page for more details. 


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