Shares of Fitbit Inc (NYSE:FIT) are up 4% on the strength of a retail stock that many people (myself included) had counted out — Best Buy Co Inc (NYSE:BBY).
Best Buy’s unexpected top-line growth was in part driven by increased demand for health and wearables.
That obviously bodes well for Fitbit stock and others, like GoPro Inc (NASDAQ:GPRO), which is up 2.8% as of this writing.
FIT stock has made a series of sizable moves over the past month, mostly notable after beating earnings and finally winning investors over.
What Lies Ahead for FIT Stock?
Some investors were nervous, however, on news that Fitbit would not release new products for the holiday season. Instead, the company offered disparate accounts, suggesting it would release mere updates to its current line.
Sure enough, we got a glimpse at the Fitbit Charge 2 and Fitbit Flex 2 last week. The Charge 2 is allegedly slimmer than both the Charge and Charge HR, sports a larger display and features an interchangeable strap and “PurePulse heart-rate” technology. The Flex 2 appears to be a cheaper option for those new to health and wearable devices.
The leaks were met with collective “sighs” from the market. After Best Buy’s earnings, however, it appears investors may have been overly pessimistic about Fitbit’s holiday prospects.
The market for wearables around the world grew a whopping 67% in the first quarter of 2016, and there’s no reason to expect that growth to slow any time soon.
That said, Fitbit is facing stiff competition from Apple Inc. (NASDAQ:AAPL), Xiaomi, Garmin Ltd. (NASDAQ:GRMN) and Samsung Electronics (OTCMKTS:SSNLF). And a Nov. 27 release for Fitbit’s latest products may mean it cedes Black Friday sales to its rivals.
At least that would make the near-40% of short-sellers in Fitbit stock happy over the holidays.
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.
