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Will Fitbit Be Better Off With Google?

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Fitbit stock (NYSE: FIT) was up by about 40% since Monday, after reports emerged that Google had made an offer to acquire the fitness tracking pioneer. This was confirmed today with news of a $2.1 billion deal, which valued Fitbit at $7.35 per share. The news is positive for Fitbit which had seen its stock decline by ~80% since its IPO in 2015. In the fitness tracker market, Fitbit is being challenged by offerings from Chinese players such as Xiaomi and Huawei, which typically sell at a fraction of the price of Fitbit devices. On the other hand, the company’s efforts in the smartwatch space have failed to pay off and it looks unlikely that Fitbit will be able to compete with the Apple Watch, which benefits from more advanced features and tight integration with the Apple ecosystem. Google, on the other hand, could see significant value in Fitbit. While the tech behemoth has been successful in the smartphone space, its wearables efforts have failed to gain traction. By acquiring Fitbit, Google could get access to an established wearables business, potentially significant intellectual property (via Fitbit’s multiple healthcare-related acquisitions), as well as a lot of health-related data. Below, we take a look at how Fitbit has fared in recent years and what the outlook could be like for the company.

Ultimately for Google it’s about how much can they grow Fitbit’s $1.5 billion revenue base. Compare Fitbit’s possible growth with other device companies in our dashboard analysis - Why Fitbit May Be Better Off With Google.

How does Fitbit’s Revenue Growth in 2018 compare with that in prior periods and what’s the forecast?

Revenue for Fitbit decreased from $1,616 Mil in 2017 to $1,512 Mil in 2018; a -6.4% decrease.

This compares with Revenue growth of:

  • 16.8% in 2016
  • -25.5% in 2017

We expect Revenue growth to be -4.1% in 2019.

How does Fitbit’s Total Expense Growth in 2018 compared with that in prior periods and what’s the forecast?

Total Expense for Fitbit decreased from $1,810 Mil in 2017 to $1,696 Mil in 2018 – a decrease of -6.3%.

This compares with Total Expense growth of:

  • 45.1% in 2016
  • -20.6% in 2017

We expect Total Expense to grow by -8.6% in 2019.

How does Fitbit’s Income/ (Loss) Before Income Taxes Growth in 2018 compare with that in prior periods and what’s the forecast?

Earnings Before Taxes for Fitbit increased from $-195 Mil in 2017 to $-184 Mil in 2018.

This compares with EBT growth of:

  • -138% in 2016
  • 78.1% in 2017

We expect EBT growth to stand at -$100 million in 2019.

How does Fitbit’s Net Income / (Loss) Growth in 2018 compare with that in prior periods and what’s the forecast?

For more information on Fitbit’s Net Income / (Loss), view our interactive dashboard analysis.

 

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