Fitbit Inc fka FIT

[JLS]

"Gloomy Outlook"?

In that article they make a year-over-year comparison.

Really? Last year they were only public for two quarters, and the last quarter is where all the Christmas sales happened.

If FIT is guilty of anything, it is that they understate anticipated earnings %100 of the time.

Here's their quarterly earnings-beats history as a public company:

Jun 15, beat by 162.50%
Sep 15, beat by 140.00%
Dec 15, beat by _40.00%
Mar 16, beat by 233.00%

I am always suspicious of numbers like that, so I refused to buy the stock.

Then along came the big drop down to $12. Then I started buying the stock.

If Fit is guilty of anything, it is that they grossly understate their expectations.

Using the current growth-rate expectations (which they've beat every time by huge numbers) the expected Y-Y growth rate is 21.4%, and their expected earnings at the end of this year is $1.17. With their estimated earnings for this year, the stock should conservatively trade at a PEG of 1.0 and that places their fair price at $21.36.

Warren says: buy when everybody else is selling.