Mizuho Securities Cuts Price Target on Fitbit (FIT) as Product Transition Weighs on 1Q Guide

Mizuho Securities maintained a Buy rating on Fitbit (NYSE: FIT), and cut the price target to $20.00 (from $38.00), following the company's 4Q earnings report. FIT reported 4Q EPS of $0.35 vs. the Street’s $0.25 estimate. Also, despite strong pre-order data from the new Blaze and Alta that exceeded internal forecasts, the company guided to below consensus EPS of $0.00-0.02 to reflect increased marketing and production capacity costs.

Analyst Betty Chen commented, "We are lowering our PT to $20 (from $38) to reflect recent multiple compression and lower NT estimates due to 1Q sales shifts and production capacity costs to meet the strong demand for new products. While we acknowledge NT overhang from lock-up expiration, we remain positive on FIT’s longer-term prospects given: 1) strong reception to new product rollout and accessories; 2) improving FY16 margins; 3) growing registered and active user base; and 4) strong Int'l growth. With shares trading at ~10x FY17 P/E, we believe investors are overly discounting FIT’s growth and improving profitability."

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 $16.52 yesterday.

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