3 Ways Fitbit Stock Can Double From Here

By Rick Munarriz Markets Fool.com

Fitbit (NYSE: FIT)can't seem to get it right. The maker of fitness trackers is trading 89% its all-time high, set two summers ago shortly after its ballyhooed IPO.

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Fitbit isn't giving up. This week alone, it has introduced new wearable fitness devices, an executive shakeup, and a focus realignment. Wall Street hasn't responded. The stock has closed lower in four consecutive trading days.

Things look bleak, but it doesn't have to stay that way. The stock has fallen to the mid-single digits, so all it has to do is work its way back up to the pre-teens to double. It's not an outlandish leap, so let's take a look at the different ways that Fitbit can make it happen.

Image source: Fitbit.

1. New products can turn things around in the U.S. market

Revenue took a 19% hit during Fitbit's fourth quarter, and the real problem is its home market, with U.S. sales suffering a 28% plunge during the holiday quarter. Nothing can reverse a gadget maker's fortunes than a hot gadget, making Monday's new product announcement that much more important.

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Fitbit introduced Fitbit Alta HR this week, updating its popular Alta line with enhanced sleep-tracking features and the ability to track heart rate. Fitbit was able to shrink the size of its PurePulse tech to measure heart rate, allowing it to incorporate the chip in devices with slim form factors. Sleep Stages leans on PurePulse to gauge the variability during sleep. In short, it measures the quality of the sleep. Sleep Insights then kick in, leaning on the data to provide personalized guidance.

This is just one of several devices that Fitbit will roll out this year, and given its weak top-line guidance for 2017 just a single hit can reverse the market's negative sentiment.

2. Don't underestimate corporate wellness programs

Fitbit is aligning its operations, splitting its focus to consumer health and fitness on one end and enterprise health in the other. Folks think of Fitbit mostly as a consumer-facing device, but Fitbit has made strides in getting employers, insurance companies, and healthcare providers to embrace the subsidization of fitness trackers as a way to encourage healthy lifestyles and lower coverage costs.

Enterprise health could be a game changer if more companies begin outfitting their employees with Fitbit gadgetry. It's a win-win-win move as employers, insurers, and employees come out ahead.

3. Making time for the smartwatch

Fitbit entered the smartwatch market last year with the launch of Blaze. It was initially successful, selling more than 1 million units in each of last year's first two quarters. Things got interesting late last year when Fitbit acquired the assets of smartwatch pioneer Pebble, giving it the ability to incorporate more features into Blaze or roll out new entry-level models.

Fitbit is committed to streamlining the number of health and fitness devices it offers consumers, making its offering less confusing. However, it continues to single out smartwatch as a category of focus.

2017 isn't supposed to be pretty. Fitbit's calling it a transition year, and it's outlook calls for a sharp 22% to 31% slide in revenue. A hit product, big gains in corporate wellness, or raising the bar as the country's second largest smartwatch maker can help turn that sentiment around.

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Rick Munarriz owns shares of Fitbit. The Motley Fool owns shares of and recommends Fitbit. The Motley Fool has a disclosure policy.