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Wearable fitness device maker Fitbit ( FIT ) is the best-positioned company to take advantage of trends in digital health and real-time fitness analytics, Oppenheimer analyst Andrew Uerkwitz said in a report Monday. Uerkwitz initiated coverage of Fitbit with an outperform rating and a 12- to 18-month price target of 25. Fitbit was down almost 3.5%, near 16, in afternoon trading on the stock market today . “We see this market as just beginning,” he said. “We see today’s lifestyle trackers as equivalent to early PDAs: a device that has limited functionality but a precursor to something much larger.” Over the long term, Fitbit will continue to add capabilities and features to its devices and software, Uerkwitz said. In the near term, it will benefit from expanding its international reach and broadening its product portfolio. Fitbit bears think wearable fitness devices will become commodities, but Uerkwitz doesn’t see that happening, at least not in the near term. “We believe software and platform are the primary ways for Fitbit to build a technology ‘moat’ and ensure continued market leadership,” he said. Fitbit gets a Composite Rating from IBD of 40 out of a possible 99. The company faces a host of current and emerging competitors, including Fossil ( FOSL ), Garmin ( GRMN ), Jawbone, Microsoft ( MSFT ) and Under Armour ( UA ). “Fitbit is viewed/valued as a one-hit wonder,” Uerkwitz said. “We see this as very misunderstood. Fitness tracking, in our opinion, is just beginning, and the end game is real-time analytics for fitness and the next step in digital health.” Retail tracker NPD Group reported Monday that Fitbit remained the leading brand in connected activity trackers in 2015, accounting for 79% of sales. Sales of connected activity trackers rose 85% in units and 110% in revenue in 2015. The average selling price for a connected activity tracker rose to $109 in 2015 from $96 a year earlier. “The increase in ASP speaks to these devices becoming more sophisticated, and that consumers are looking for better-quality devices, not just entry-level products,” NPD analyst Ben Arnold said in a statement . “This, combined with unit growth, shows that prices aren’t falling to drive demand; demand is increasing along with rising prices.” RELATED: Fitbit Is Not GoPro, Insists Analyst Despite Cutting Price Target . Scalper1 News
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