FIT Stock Soars After Wearable Technology Maker Strikes Deal with HIPAA
Fitbit Inc. (NYSE:FIT) shares have skyrocketed by more than 30% since the wearable technology company launched its initial public offering in June.
What you need to know is that Fitbit achieved a record breakthrough on Wednesday which is causing its stock price to surge. But before I dive into that, you might be asking what Fitbit does, exactly.
Is Fitbit Inc. a $100 Stock?
Fitbit is basically a wristwatch that tracks some pretty neat data about you. It counts the number of steps you take, your heart rate, the number of calories you burn, your sleep activity, and even your smartphone’s caller ID. Fitbit then syncs this data, along with a slew of other cool features, to your mobile device through an app.
What Fitbit does is help you track your physical activity, then condensing it into information and reports that you can use to improve your quality of life. The wearable device is useful and low-priced, which is why the FIT stock price has been doing so well since launching.
On September 23rd, Fitbit reported that its health products are now fully in compliance with HIPAA, the U.S. Health Insurance Portability and Accountability Act. (Source: Dispatch Times, last accessed September 24, 2015.) The company reiterated its commitment to maintaining its customers’ data security and privacy, and believes this compliance with HIPAA not only supports that commitment but also helps to build new relationships with corporations who want to make their employees healthier.
The Fitbit stock price found positive support on the news, as it is among the first wearable fitness devices to receive the HIPAA compliance. This development means that Fitbit will now be working with companies on managing health information.
Fitbit is now in partnership with approximately 50 of the Fortune 500 companies, including giants like Adobe, Target, and British Petroleum. If the company manages to leverage this position as the first major fitness-tracking company to partner with large corporations, FIT stock could soar.
Chart courtesy of www.StockCharts.com
One report shows that Fitbit currently holds a massive 24.3% share of the overall wearable fitness device market, as of the second quarter of 2015. (Source: Digital Trends, last accessed September 24, 2015.) The corporate wellness-oriented services make up only about 10% of Fitbit’s sales. If the enthusiasm of the Fortune 500 companies to embrace these technologies is any indication, this will only increase. Fitbit stock thus has huge upside potential.
The Internet of Things (IofT) is now a ubiquitous concept in our modern world. Companies who successfully ride the wave of technological integration grow at ludicrous speeds, often achieving massive profits in a short period of time.
Fitbit’s dive into integrating personal fitness with corporate interests certainly fits the bill, and the rise in the Fitbit stock price reflects that.
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Now, I’ve always been a big supporter of companies that provide real value to their customers, and how that value translates into big jumps in stock value.
In contrast to Apple’s watch, which is a device that essentially distills a smartphone and PC into a wearable device without differentiating itself from either very well, Fitbit is a specific device with very specific value.
Let me explain why Fitbit adds value to personal lives, and why this will mean big gains for the Fitbit stock price forecast.
The most important factor in how the “Internet of Things” drives value is that it brings together aspects of your life which were previously isolated from one another. By connecting these things, both become more valuable as a result.
Fitbit, for example, helps you track your health and well-being, giving you quantifiable feedback so that you can adjust your lifestyle to optimize your health. By connecting this personal value to the interests of the corporation you work for—which wants you to be healthy and happy so that you’re more productive—both sides win.
Forget Apple; Focus On Fitbit Stock Instead
The utility value added by Fitbit is simple and clear, and it doesn’t take an MBA to figure out that with this good of a strategy, Fitbit stock is set to skyrocket.