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Strategies & Market Trends : Value Investing
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To: E_K_S who wrote (58591)12/3/2016 6:57:39 PM
From: Graham Osborn1 Recommendation  Read Replies (1) of 78750
 
As I say, IMO FIT is a hardware and not a services company. They need to increase device sales to boost revenue. The business model is no more sustainable than AAPL's is, but as we have seen a strong branded hardware product can have a good run before the inevitable commoditization phase. If they succeed in services that's great, but given how little revenue FIT generates from "subscribers" currently I consider that a new and unproven business model for them (at best).

GPRO has already proven they can't generate replacement sales. They are trying to replace falling revenues with unproven product lines like drones. I generally don't invest in businesses that aren't growing, so GPRO fails that test. If FIT starts experiencing a precipitous decline in sales I will probabiy not buy back in, but I have time to judge that trajectory over the next few quarters.
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