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Fitbit (FIT) to Report Q2 Earnings: What's in the Cards?

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Fitbit Inc. (FIT - Free Report) is set to report second-quarter 2017 results on Aug 2. Last quarter, the company had posted in-line results.

Notably, Fitbit's results surpassed the Zacks Consensus Estimate in the preceding three quarters. It has an average four-quarter positive surprise of 22.48%.

The company's shares have lost 29.5% year to date, underperforming the industry’s gain of 8.6%.

Let us see how things are shaping up for this announcement.

Factors at Play

Fitbit’s growth has been slowing down with smartwatches outshining the fitness wearable category, influx of new wearables, lack of upgrades among existing users, and lackluster growth in the Asia Pacific region.

Also, increased competition from fitness device makers like Garmin, Jawbone and Misfit, and increased popularity of smartwatches, leading to slower growth in fitness wearable space, continued to be major headwinds in the last quarter.

However, Fitbit is taking initiatives that are expected to pull the company out from slow growth. These steps include offering a streamlined set of products, improving software and services to offer more personalization to customers and achieving greater integration into the healthcare ecosystem.

For the second quarter of 2017, Fitbit expects revenues to remain in the range of $330–$350 million. The company expects non-GAAP loss per share to be in the range of 14–17 cents. It expects non-GAAP tax rate to be approximately 43%.

Earnings Whispers

Our proven model does not conclusively show that Fitbit will beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 22 cents. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Fitbit has a Zacks Rank #3 (Hold).We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Fitbit, Inc. Price and EPS Surprise


Fitbit, Inc. Price and EPS Surprise | Fitbit, Inc. Quote

Stocks to Consider

Symantec Corporation (SYMC - Free Report) , with an Earnings ESP of +16.67% and Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arrow Electronics, Inc. (ARW - Free Report) , with an Earnings ESP of +1.13% and a Zacks Rank #2.

The Priceline Group Inc. , with an Earnings ESP of +2.31% and a Zacks Rank #3.

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