(Updated - April 11, 2016 10:43 AM EDT)

Fitbit (NYSE: FIT) is gaining early amid positive analyst comments at Morgan Stanley on Blaze and Alta. Analyst Katy Huberty said checks suggest Fitbit's 1Q results and 2Q guidance will exceed consensus estimates.

"We expect Fitbit to beat our revenue and EPS estimates of $431M and $0.03, and consensus of $433M and $0.02," Huberty said. "Our checks indicate demand for Blaze and Alta were ahead of expectations, and retailers are already putting in re-orders for the Blaze, which shipped earlier than the Alta."

The analyst expects Fitbit to report 10-15% upside to revenue or $475-495M. While they also expect EPS to surprise positively, they see less upside in light of higher production costs during the new product ramp.

For Q2 guidance, the analyst expects management will remain conservative on guidance but still expect 2Q estimates to move higher post earnings. "Fitbit continues to enjoy better than expected demand for the Blaze and Alta, and better accessories attach rates than prior products," she said. "Fitbit will also receive a boost from expanded distribution and channel restocking, especially as they expand shelf space at retailers in the spring reset reflecting Fitbit's strong competitive positioning."

They expect margin to rebound to 48.9% in June (consensus 48.6%) as we move past the initial production ramp for the new products and accessories mix increases.

While investor sentiment on FIT remains negative due to questions around competition and sustainability of the category, they remain positive and sees positive estimate revisions and multiple re-rating driving the stock towards their $32 price target.