Fitbit earnings report analysis

Fit reported a very strong quarter and guided the 2016 full year to be about inline with analyst estimates. But the guidance for next quarter was quite light.

Revenues came in $711.6MM (vs. the St $648MM).  Earnings per share was 0.35 (vs. the St 0.25).  EBITDA $125.3MM (vs. the St $99MM).  GMs 48.8% (vs. the St 48.15%).  FIT sold 8.2MM devices in the Q (vs. the St 7.5MM).  For ’16 FIT sees revs $2.4-2.5B (vs. the St $2.4B), GMs 48.5-49% (vs. the St 48.5%), EBITDA $400-480MM (vs. the St $463MM), and EPS 1.08-1.20 (vs. the St 1.14).  For Mar they see revs $420-440M (vs. the St $485MM), GMs 46.5% (vs. the St 48.3%), and EPS 0.00-0.02 (vs. the St 0.23).

The results and guidance aren’t bad, certainly not a disastrous report given how far this stock had fallen heading into the report. The stock is down 14% this morning but we’ve seen several tech stocks that were crushed heading into their report eventually rally back to even or even green as the trading day wears on. I’m not sure $FIT will rally intraday, but I don’t plan on selling out of it today. This is one of my smallest positions but I’m obviously not happy about how poorly this stock has traded while I’ve owned it. I think the stock is likely to stabilize in the mid-teens here and could possibly even run back towards $20 in coming days. No change in my own stance on it today.

Here’s Gregg Greenberg​ interviewing me today, talking $FB, $AMZN, $NFLX, $GOOG
https://www.youtube.com/watch?v=L5bYZiyWqc8