Critical Contrast: Apple (AAPL) vs. Fitbit (FIT)

Apple (NASDAQ: AAPL) and Fitbit (NYSE:FIT) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Analyst Ratings

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This is a summary of recent ratings and target prices for Apple and Fitbit, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apple 1 15 28 1 2.64
Fitbit 3 8 6 0 2.18

Apple currently has a consensus target price of $203.55, indicating a potential upside of 19.70%. Fitbit has a consensus target price of $6.79, indicating a potential upside of 40.61%. Given Fitbit’s higher possible upside, analysts clearly believe Fitbit is more favorable than Apple.

Profitability

This table compares Apple and Fitbit’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apple 21.13% 37.37% 13.82%
Fitbit -17.16% -17.11% -10.06%

Risk & Volatility

Apple has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, Fitbit has a beta of 1.9, suggesting that its stock price is 90% more volatile than the S&P 500.

Insider & Institutional Ownership

61.4% of Apple shares are held by institutional investors. Comparatively, 61.5% of Fitbit shares are held by institutional investors. 0.1% of Apple shares are held by insiders. Comparatively, 29.1% of Fitbit shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Apple and Fitbit’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Apple $229.23 billion 3.76 $48.35 billion $9.21 18.46
Fitbit $1.62 billion 0.62 -$277.19 million ($0.65) -7.43

Apple has higher revenue and earnings than Fitbit. Fitbit is trading at a lower price-to-earnings ratio than Apple, indicating that it is currently the more affordable of the two stocks.

Dividends

Apple pays an annual dividend of $2.52 per share and has a dividend yield of 1.5%. Fitbit does not pay a dividend. Apple pays out 27.4% of its earnings in the form of a dividend. Apple has increased its dividend for 5 consecutive years.

Summary

Apple beats Fitbit on 13 of the 18 factors compared between the two stocks.

Apple Company Profile

Apple Inc. (Apple) designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Company’s products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud, and a variety of accessory, service and support offerings. The Company also delivers digital content and applications through the iTunes Store, App StoreSM, iBookstoreSM, and Mac App Store. The Company distributes its products worldwide through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. In February 2012, the Company acquired app-search engine Chomp.

Fitbit Company Profile

Fitbit, Inc., a technology company, provides health solutions in the United States and internationally. The company offers a line of devices, including Fitbit Surge, Fitbit Blaze, Fitbit Charge 2, Alta HR, Alta, Fitbit Flex 2, Fitbit One, and Fitbit Zip activity trackers; Fitbit Ionic smartwatches; Fitbit Aria 2 Wi-Fi smart scales; and a range of accessories, such as bands and frames for its devices, as well as Fitbit Flyer, a wireless headphone designed for fitness. It also offers Fitbit online dashboard and mobile apps that sync automatically with and display real-time data from its wearable devices; and Fitbit Coach that offers exercise programs through personal trainer and yoga apps. The company sells its products through consumer electronics and specialty, e-commerce, mass merchant, department store, club, and sporting goods and outdoors retailers; wireless carriers; distributors; and Fitbit.com, an online store, as well as directly to consumers. The company was formerly known as Healthy Metrics Research, Inc. and changed its name to Fitbit, Inc. in October 2007. Fitbit, Inc. was founded in 2007 and is headquartered in San Francisco, California.

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