Fitbit, Inc’s (NYSE: FIT) new smartwatch, the Versa, is clearly much more popular than its predecessor, the Ionic. Fitbit announced earlier this week that more than 1 million Versa smartwatch have been sold since the device was launched in April, making it the most popular device in Fibit’s history. Changes that Fitbit made to the Versa have clearly resonated tremendously with reviewers and the public. As word spreads about these positive changes through word of mouth, social media, and news stories, and as more users come to appreciate the multiple ways in which Fitbit’s smartwatch is superior to Apple Inc’s (NYSE: AAPL) Apple Watch, the Versa’s popularity will explode, and Fitbit stock will rally much further.
Versa’s appearance seem to be more appealing than that of Ionic. VentureBeat reports that Ionic is “blockier,” while Versa “simply has a more refined look and feel.” Importantly, Ionic costs around $300, while Versa costs about $200. And Versa launched with 700 apps, compared to the three apps that were available on Ionic when it was released.
Superior to Apple Watch
As more people give the Versa a chance because of its lower price and superior aesthetics, word will spread about its superiority to Apple Watch on many fronts. Specifically, Versa offers five days of battery life versus just one day for Apple Watch. Fitbit devices, unlike the Apple Watch, comes with an app that provides workout videos and audio coaching. Fitbit is also working with Dexcom on an app that will allow diabetes patients to continuously monitor their glucose levels.
Perhaps most significantly on the app front, the Versa, unlike Apple Watch, includes a female health tracking feature. With the feature, women and girls can access all of their female health data in one place and obtain a great deal of information about female health. The app has apparently become very popular, as more than 2.4 million users have added it and 1.8 million users have added at least one period to the app’s calendar, according to the company.
Fitbit Stock’s Low Valuation, Great Outlook
Much more is yet to come for Fitbit and Fitbit stock. As I wrote in a previous column, “the Street is underestimating the potential impact of the company’s deal with Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL) since the companies are working together to “better manage chronic conditions” and “transform the future of wearables.” With the innovative genius of both Fitbit and Google, along with Google’s huge cash pile and massive connections, the two companies should be able to accomplish some truly great things in the coming months and years.
Meanwhile, even with its recent rally, Fitbit stock is still incredibly cheap. It’s trading with an enterprise value of around $600 million. Compare that to the $7.5 billion that Microsoft Corporation (NASDAQ: MSFT) paid for open software development platform gitHub, which doesn’t appear to have any revenue at all. Fitbit stock is still incredibly cheap for a company that has a pretty big foothold in the up-and-coming wearables space, has a very popular new product, just signed a cooperation deal with Google, and has unveiled some very impressive innovations over the years.
Given Fitbit’s outlook and the stock’s current valuation, Fitbit stock looks poised to easily double over the next 12 months. Consequently, investors should definitely buy Fitbit stock at current levels.
As of this writing, Larry Ramer owned shares of Fitbit stock.
