- Fitness company Fitbit has grabbed the limelight recently due to news of possible acquisition by Alphabet.
- It has been two days since the news broke but until now there’s no confirmation, suggesting that other companies are also vying for the smartwatch-maker.
- The rumors will likely keep shares soaring as traders speculate on the acquisition price.
Over the last couple of days, rumors of Fitbit (NYSE:FIT) being acquired by Google’s parent company, Alphabet (NASDAQ:GOOGL), has been circling the internet. According to Reuters, Alphabet has already made an offer to purchase the U.S.-based smartwatch-maker as it tries to enter the crowded wearables space.
After the news of a possible acquisition broke out, shares of the fitness tracker company exploded. It opened Monday at $4.29 and climbed as high as $6.30 on Tuesday before the stock pulled back due to overheated conditions.
Are we seeing a pump and dump scheme or is there something going on suggesting that a move higher is warranted? We looked at the company’s fundamentals and discovered that it is attractive enough to lure suitors other than Alphabet.
Fitbit Touts Strong Fundamentals
Over the last few years, many investors have focused on Facebook, Amazon, Apple, Netflix, and Google (FAANG) stocks. Consequently, they overlooked tech companies with strong fundamentals just like Fitbit. The fitness tracker company has a stellar balance sheet.
A pseudonymous analyst named CÆTUS has been following the company for over a year. He looked at Fitbit’s balance sheet and discovered that the stock offered a “stupendous risk-reward” ratio.
Fitbit has a solid balance sheet. | Source: Twitter
In addition to that, the makers of fitness wearables generated revenues of $1.5 billion in 2018.