Today, Fitbit announced that it will have two new fitness tracking devices available for purchase in the fall. These products are the Fitbit Charge 2 and the Fitbit Flex 2. They are the next gen products for two of the company’s best selling wearable fitness trackers. FIT stock has lost over 55% of its value over the last year, so can these new devices drive more growth for the company? Below, I outline the differentiable features of these devices and attempt to determine how they could drive more growth for Fitbit going forward.
Fitbit Charge 2
The improvements made to the Fitbit Charge HR suggest that the company is trying to compete for some sales from the smartwatch market. Right away, users will notice that the display is much larger (4x) than its predecessor. The Charge is the company’s best-selling device and the new version comes with a lot of new features that could give current Charge users an incentive to upgrade.
The bands for the new device will be interchangeable, and this allows users to customize their device for various occasions. This along with other features could set the product apart from other competing fitness trackers.
According to a press release, the Charge 2 will estimate VO2 Max, which is a measure of the maximum volume of oxygen that an athlete can use. One other neat feature of the device is its guided breathing sessions which help athletes to calm their breathing and manage their heart rate. These last between two to five minutes and the Charge 2 displays real-time heart rate visualizations during the sessions.
The larger display of the device complements a new feature which allows athletes to view multiple stats in real time. This will help users to make instant adjustments to their workouts. The Charge 2 has multiple sports modes, and it includes tracking for activities such as yoga, aerobic workouts, and weight lifting.
The device can link with GPS on a smart phone, and it also offers all-day tracking. Even though it includes so many more features in addition to a larger screen, the company claims that it can last up to five days on a charge. The Charge has certainly come a long way and it stands to make a splash in the wearables market. It should be noted, however, that many other fitness trackers can do most of the things that the new Charge 2 boasts about.
Fitbit Flex 2
Fitbit’s Flex 2 is 30% smaller than its predecessor. The tracker allows Fitbit to tap into the large pool (pun intended) of swimming athletes out there since it is the company’s first swim-proof tracker. One feature of the Flex 2 which could appeal to swimmers is its swim tracking feature which automatically counts laps and measures duration and calories burned.
The device is great for athletes who want to simply exercise without having to prepare the tracker beforehand. The Flex 2 automatically recognizes exercises such as walks, rides, runs, elliptical, sports, aerobic workouts, and swims.
The Flex 2 is a removable tracker that is interchangeable, and this can be helpful since different exercises may demand different types of bands. Further customization can be achieved by placing the tracker in Fitbit-designed bracelets and pendants.
This could foster growth for the company, as its fitness accessories range from low-end products to high end accessories such as 22k-plated gold bangles. This opens up a wide potential user base since athletes from all income levels will have customizations that can appeal to them. The Flex 2 is not just about simplicity, it also seeks to make a major fashion statement by partnering with designers and brands. Designer collections will be available from PUBLIC SCHOOL, Simply Vera Vera Wang for Kohl’s, and Tory Burch. If Fitbit expands on its partnerships, it could become better known for its fashionable tracking accessories.
Bottom Line
These new products give Fitbit a much needed upgrade to its portfolio, and the trackers will gain favorability with many athletes looking for a new fitness tracking device. The two trackers have features which allow them to tap into new demographics. That said, the Charge 2 and Flex 2 are not game changers by any means. Many other competitors have devices which do most of the things that either of these devices offer. Fortunately, Fitbit’s new devices are selling at a reasonable price point, with tags on the Charge 2 and Flex 2 coming in at $149.95 and $99.95 respectively.
Something else which helps Fitbit is its large market share in the wearables market. It boasts an 80% share in the US, according to The Verge. The company’s position in the fitness tracking industry is well-established, and these new products should do well in solidifying its name as the go-to brand for fitness trackers. As sales for the wearables market grow, Fitbit stands to be a prime beneficiary going forward. FIT stock is a Zacks Rank #3 (Hold), and it is expected to release its next quarterly earnings reportin early November.
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Can Fitbit's (FIT) New Devices Boost its Stock?
Today, Fitbit announced that it will have two new fitness tracking devices available for purchase in the fall. These products are the Fitbit Charge 2 and the Fitbit Flex 2. They are the next gen products for two of the company’s best selling wearable fitness trackers. FIT stock has lost over 55% of its value over the last year, so can these new devices drive more growth for the company? Below, I outline the differentiable features of these devices and attempt to determine how they could drive more growth for Fitbit going forward.
Fitbit Charge 2
The improvements made to the Fitbit Charge HR suggest that the company is trying to compete for some sales from the smartwatch market. Right away, users will notice that the display is much larger (4x) than its predecessor. The Charge is the company’s best-selling device and the new version comes with a lot of new features that could give current Charge users an incentive to upgrade.
The bands for the new device will be interchangeable, and this allows users to customize their device for various occasions. This along with other features could set the product apart from other competing fitness trackers.
According to a press release, the Charge 2 will estimate VO2 Max, which is a measure of the maximum volume of oxygen that an athlete can use. One other neat feature of the device is its guided breathing sessions which help athletes to calm their breathing and manage their heart rate. These last between two to five minutes and the Charge 2 displays real-time heart rate visualizations during the sessions.
The larger display of the device complements a new feature which allows athletes to view multiple stats in real time. This will help users to make instant adjustments to their workouts. The Charge 2 has multiple sports modes, and it includes tracking for activities such as yoga, aerobic workouts, and weight lifting.
The device can link with GPS on a smart phone, and it also offers all-day tracking. Even though it includes so many more features in addition to a larger screen, the company claims that it can last up to five days on a charge. The Charge has certainly come a long way and it stands to make a splash in the wearables market. It should be noted, however, that many other fitness trackers can do most of the things that the new Charge 2 boasts about.
Fitbit Flex 2
Fitbit’s Flex 2 is 30% smaller than its predecessor. The tracker allows Fitbit to tap into the large pool (pun intended) of swimming athletes out there since it is the company’s first swim-proof tracker. One feature of the Flex 2 which could appeal to swimmers is its swim tracking feature which automatically counts laps and measures duration and calories burned.
The device is great for athletes who want to simply exercise without having to prepare the tracker beforehand. The Flex 2 automatically recognizes exercises such as walks, rides, runs, elliptical, sports, aerobic workouts, and swims.
The Flex 2 is a removable tracker that is interchangeable, and this can be helpful since different exercises may demand different types of bands. Further customization can be achieved by placing the tracker in Fitbit-designed bracelets and pendants.
This could foster growth for the company, as its fitness accessories range from low-end products to high end accessories such as 22k-plated gold bangles. This opens up a wide potential user base since athletes from all income levels will have customizations that can appeal to them. The Flex 2 is not just about simplicity, it also seeks to make a major fashion statement by partnering with designers and brands. Designer collections will be available from PUBLIC SCHOOL, Simply Vera Vera Wang for Kohl’s, and Tory Burch. If Fitbit expands on its partnerships, it could become better known for its fashionable tracking accessories.
Bottom Line
These new products give Fitbit a much needed upgrade to its portfolio, and the trackers will gain favorability with many athletes looking for a new fitness tracking device. The two trackers have features which allow them to tap into new demographics. That said, the Charge 2 and Flex 2 are not game changers by any means. Many other competitors have devices which do most of the things that either of these devices offer. Fortunately, Fitbit’s new devices are selling at a reasonable price point, with tags on the Charge 2 and Flex 2 coming in at $149.95 and $99.95 respectively.
Something else which helps Fitbit is its large market share in the wearables market. It boasts an 80% share in the US, according to The Verge. The company’s position in the fitness tracking industry is well-established, and these new products should do well in solidifying its name as the go-to brand for fitness trackers. As sales for the wearables market grow, Fitbit stands to be a prime beneficiary going forward. FIT stock is a Zacks Rank #3 (Hold), and it is expected to release its next quarterly earnings reportin early November.
The Zacks Rank is a truly marvelous trading tool. Our ranking system has beaten the S&P 500, yielding an average return of 25% per year for the last 29 years! Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>