Fitbit are growing fast but they have a huge competitor; Apple. To continue to grow fast they have decided to go public. Fitbit has filed for a $100 million IPO, and the San Francisco-based wearable company plans to trade on the NYSE under the ticker symbol FIT.
The company is managed by Eric Friedman and James Park and their company called Fitbit is known for its products of the same name, which are activity trackers, wireless-enabled wearable devices that measure data such as the number of steps walked, quality of sleep and other personal metrics.
Fitbit has made a big jump from 2013 to 2014. They had a $52 million net loss on $271 million in revenue in 2013. A year later (2014) they have jumped to $745 million in revenue, with about $132 million in net income. That`s pretty impressive.
Fitbit sold nearly 11 million devices last year, and half of their sales come in Q4 is due to the holidays. The biggest explaination for the jump is an increase in the international sales. The earnings are five times bigger from Q1 2014 to Q1 2015.
Revenue will almost certainly top $1 billion in 2015, and Fitbit hit $191 million in profit in 2014 at a 26% EBITDA margin. Active users jumped from 2,6 million in Q4 2013 to 6,7 million active users in Q4 2014. Active users are skyrocketing.
It`s not bad to be a Fitbit owner and shareholder these days. President Obama also wears one.
The biggest problem for Fitbit is probably not Apple Watch, but peoples usage. According to Wall Street Journal, 42% of people stop wearing fitness trackers after 6 months. So, any growth left for Fitbit is another people who haven`t tried the watch yet?
Fitbit devices cost a fraction of Apple`s watches. Their prices range from $59 to $250, while Apple Watch costs about $350. Apple can help Fitbit boost in the short-term. One of the reasons is their cheaper price.
“We believe that we have been one of the drivers of the growth of the wearable devices market, and that the future growth of this market represents a significant opportunity for us,” Fitbit said in its SEC filing statement.
I don`t have an Apple Watch or a Fitbit, but I still have my good old watch which tracks my heart rate. My watch is about 20 years now, and I still use it. Early this morning my heart rate was 41, which tells me that I am in good shape.
I use the watch regularly because I excercise a lot, and I consider my watch to be a great tool. Fitbit need to find a way to curb the drop-out rate among users and show them real, sustainable health gains.
People need to understand the value of the watch.
It can be a cheap insurance!
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Ket Garden
Shiny bull 