What Investors Need To Know About FitBit's IPO

The wearable fitness tracking device company Fitbit Inc. is expected to raise $600 million with its initial public offering by Wednesday evening, with shares becoming available to publicly trade on Thursday. If the expected numbers are correct, the deal would be the fifth-largest IPO in the U.S. this year.

Based in San Francisco, Fitbit Inc. makes wearable fitness devices that are able to track an individual’s daily steps, calories burned, floors climbed, along with sleep duration and quality. Other devices the company produces track hear rate, and collect information regarding speed, duration, and exercise routes. Data collected can be analyzed and shared with friends as well.

Investors are teaming with excitement over the company’s stock, due to an increased interest by consumers in the company’s devices, as well as the strong numbers FitBit has reported. According to its SEC filing, Fitbit reported a net income of $132 million for 2014, and $745 million in total revenue. Their estimated revenue for 2015 is $1.4 billion, and between $1.7 and $1.8 billion for 2016. Between 2013 and 2014, the company sold more than double the amount of devices, and in that time period revenue nearly tripled.

As of Tuesday, the company and its shareholders raised the number of shares available for sale to $34.5 million, in addition to raising the estimated price range to between $17 and $19 per share. This gives FitBit a $3.7 billion valuation.

Trading under the stock symbol of “FIT," Fitbit Inc. is a company that needs to be watched closely by investors. Many are comparing FitBit to fellow technology company GoPro Inc. (GPRO - Analyst Report), whose shares currently sit at a price more than double that of its initial offering price. If Fitbit is able to replicate a success level comparable to GoPro, the company and its new shareholders will be sitting in a very good situation in the coming months.
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