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Analysts Share Two Cents on FitBit Inc (FIT) and Qorvo Inc (QRVO) Following Meetings With Managements


Analysts from Oppenheimer and Brean Capital share their two cents on wearable fitness device maker Fitbit Inc (NYSE:FIT) and wireless chip maker Qorvo Inc (NASDAQ:QRVO), following investor meetings for each. Both analysts are bullish on the stocks as one predicts stellar sales for Fitbit’s new products, while the other believes QRVO has established itself in the market and highlights new opportunities.

Fitbit Inc

Analyst Andrew Uerkwitz of Oppenheimer weighed in on FitBit following his firm’s meeting with CFO Bill Zerella, focusing on replacement cycels and operating expenses. Most notably, the analyst highlighted management’s increased commitment to on international growth. The analyst pointed to the last week’s “Fitbit-Day” in China, where the company was on Alibaba’ front page, holding a top spot in the global consumer brands that BABA promotes.

In the meeting, management expressed a long term sales and marketing target of 15% of revenues, which it has accomplished in some countries. He explains “We believe in markets where FIT has achieved brand awareness (the US and UK), OpEX is already at these targets.” The analyst also justifies recent S&M increases to further increase its international presence. He states, “We believe International spend is higher as a percentage of spend vs. 23-24% of revenues, as FIT has the opportunity to accelerate adoption in markets and take share.”

Regarding R&D, the analyst management stating the team is facing “difficult choices” managing projects and teams as the company “moves deeper into fitness, software, and digital health.” As a result, the analyst predicts the engineering team to increase from 700-1000. Based on current guidance, the analyst suspects that upgraded products will release in October, believing production of these products will start soon. Uerkwitz sees a...