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The Swift FCF Yield: Fitbit

Q2 2016

Fitbit FCF Yield Q2 2016

Fitbit, Inc. (NYSE: FIT) continues to drive revenue based on aerobic and fashionable aspirations of the hope-to-be-thin consumer. Tracking steps, however, is an ability that GPS tech, e.g. Garmin Ltd. (NASDAQ: GRMN), has long had under grasp. Smartwatches have also been well covered by Alphabet, Inc. (NASDAQ; GOOGL) and Apple, Inc. (NASDAQ: AAPL). In some ways, Fitbit sprung amongst sleeping giants, but then those giants struck back.

The stock shares of Fitbit took to early flight, but have since plummeted towards a more acceptable reality. Is this a tech IPO bust or a trusted growth stock? Will it survive in a land of easily replicable concept: fitness tracking? The answers are debatable and definitely tradeable.

Here is a swift look at Fitbit's Free Cash Flow (FCF) Yield for Q2 2016:

FCF Yield Chart

That is to say, Fitbit's FCF of $350m is approximately 10.5% of the stock's market capital; 15.5% of the enterprise value.

Free Cash Flow can be tabulated by taking the value of the company's operating cash flow and subtracting from it the value of capital expenses. The yield is then formulated by dividing the result by either the market capital or enterprise value.


Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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