Fitbit (FIT) has taken Main Street by storm since it made its public debut on June 18, and while Wall Street was a bit skeptical of the wearable technology company at first, it appears to have finally come around to it.
Fitbit stock is already up nearly 13% so far this week, and I see no reason to believe FIT won’t continue its climb in the near term.
Let’s back up a bit first to get a better picture of the business behind FIT.
Fitbit is a manufacturer of fitness-tracking wearables designed to help users lead a healthier, more active lifestyle. While FIT certainly has a lot of big name competitors — Apple (AAPL) being one of them — Fitbit carved its niche and is growing within it spectacularly.
In dollar terms, FIT currently holds 85% of the wearables market, and in 2014 FIT raked in nearly $1 billion on the top line more than $100 million of that to the bottom line.
And as of March, Fitbit grossed more than $300 million, putting it on pace to crack $1.3 billion gross sales.
Click to Enlarge FIT is no fluke. Just look at that chart!
The FIT IPO was priced at $20, which made Fitbit the fifth-largest IPO of the year so far. And even though the $20 price was above previous expectations, the stock opened 52% higher at $30.40 in its debut on June 18, raising nearly $740 million and valuing the company at more than $4 billion.
Today, Fitbit stock has surged more than 60% in its less than 20 days on the market and hit new all-time highs every day this week!
I’m typically not the first one to jump on an IPO bandwagon. I like to see one or two earnings reports in order to truly get a feel of what’s going on at the company.
However, I really like the potential in this one and see it as a great near-term opportunity for a lot of investors. Plus, I love that Fitbit didn’t pull the typical Wall Street maneuver and rip off its customer base with an overpriced IPO.
I liked this stock down at $30 — a price it hasn’t traded even close to since its second day on the market — and I still love it at current levels. While I wouldn’t recommend camping out in this name, I do think it can provide a solid return in a very short amount of time. I’m looking to see FIT climb to $55, and with the way it’s been trading recently, I don’t expect it to take very long.
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