Fitbit's (FIT) Infusion of Fashion into Function with New Offerings Could Help Drive Conversions - Piper

Piper Jaffray affirms Fitbit (NYSE: FIT) with an Overweight rating and $60 price target after Fitbit introduced its new Fitbit Alta fitness wristband.

Analyst Erinn E. Murphy noted the following key highlights from today's conference call with Fitbit on the new device:

1. Alta will now sit at the top of the Everyday Fitness segment (entry level);
2. Charge which currently sits at $129.99 will be discontinued--a process that will be happening shortly;
3. this product is one of multiple products to launch this year;
4. the gross margins are closer to 50%;
5. Alta to launch in North America at retail in March, and globally in April; and
6. the major functionality differences includes reminders to move, SmartTrack, smart notifications (text, call, calendar) and a higher fashion appeal given the sleeker form factor and the accessories strategy that goes along side with it.

On Fitbit's recent product launches, Murphy said: As a reminder, Fitbit launched the Fitbit Blaze earlier this year at CES. This launch was timed in tandem with NYFW given the sleeker and more aesthetic form factor. The Blaze will also launch in March at retail with a $199.99 price point. The infusion of fashion in their product should aid the company to convert retail consumers and help drive a product upgrade cycle. We see the Alta device as one that the Flex consumers could upgrade too.

For an analyst ratings summary and ratings history on Fitbit click here. For more ratings news on Fitbit click here.

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