Fitbit (FIT) Bestowed Pre-IPO 'Buy' Rating

One day before its highly-anticipated IPO, Dougherty & Co analyst Charles Anderson initiated coverage on Fitbit (NYSE: FIT) with a Buy rating and a price target of $28. This is above the expected $17-$19 range the IPO is indicated to price, which was recently raised from $14-$16.

"Fitbit is perhaps the fastest-growing mass market consumer electronics company in the World," Anderson said. "Importantly, Fitbit has already proven that it is more than a one-product company by extending into the GPS fitness watch category late last year (the Surge). We see easy comps in the near-term, along with GM% upside if Fitbit can strike more rational retailer terms. This should allow shares to work in the immediate-term. Longer-term, there are many competitive threats -- from Xiaomi at the low-end and Apple at the high-end to new form factors (clothing with activity sensors built in?). Balancing this, we are assigning a $28PT, with nets a Buy rating."

The firm's PT is based on 4x EV/S and 35x P/E on our FY16 estimates. The analyt said these multiples are consistent with high growth peers in consumer electronics, sports apparel and health care IT.

For an analyst ratings summary and ratings history on Fitbit click here. For more ratings news on Fitbit click here.

Shares of Fitbit closed at $8.78 yesterday.

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