Markets

Can Fitbit (FIT) Stock Surprise Investors Post Q4 Earnings?

Fitbit Inc.FIT is set to report fourth-quarter 2016 results on Feb 22. Last quarter, the company posted a positive earnings surprise of 18.18%.

Over the past one year, shares of Fitbit underperformed the Zacks categorized Electronic Measuring Instruments industry. While the industry gained 21.71%, the stock generated a loss of 62.49%.

Let us see how things are shaping up for this announcement.

Factors at Play

Fitbit reported modest third-quarter results with the bottom line figures exceeding the Zacks Consensus Estimate, while the top line matching the same.

The company's overseas growth and the rise in corporate wellness programs are expected to add users to its ecosystem and drive fourth-quarter results. At the same time, Fitbit has been introducing a number of new products and adding new clients to its customer base. These innovations will significantly enhance user experience on the Fitbit platform, thus, driving growth.

However, Fitbit faces stiff competition from several fitness-device makers such as Garmin Ltd. (GRMN), Jawbone and Misfit.

For the fourth quarter, Fitbit expects revenues in the range of $725-$750 million. The Zacks Consensus Estimate is pegged at $575.8 million. On a non-GAAP basis, earnings per share are expected between 14 cents and 18 cents and tax rate of approximately 33%.

Earnings Whispers

Our proven model does not conclusively show that Fitbit will beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate is pegged at a loss of 61 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Fitbit has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Fitbit, Inc. Price and EPS Surprise

Fitbit, Inc. Price and EPS Surprise | Fitbit, Inc. Quote

Stocks to Consider

McDermott International, Inc. MDR with an Earnings ESP of +100.0% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

Enable Midstream Partners, LP ENBL , with an Earnings ESP of +11.76% and Zacks Rank #2.

Exact Sciences Corporation EXAS with an Earnings ESP of +5.00% and a Zacks Rank #2.

Just Released - Driverless Cars: Your Roadmap to Mega-Profits Today

In this latest Special Report, Zacks' Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making - autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Enable Midstream Partners, LP (ENBL): Free Stock Analysis Report

Exact Sciences Corporation (EXAS): Free Stock Analysis Report

McDermott International, Inc. (MDR): Free Stock Analysis Report

Fitbit, Inc. (FIT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

ENBL EXAS FIT

Other Topics

Earnings Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More