Fitbit, Inc. FIT has developed an emergency ventilator — Fitbit Flow — in a bid to meet the growing need for ventilators during the Covid-19 pandemic.
The decision came on the heels of the company’s recognition of heightened demand that is massively outstripping supply for this device in battling COVID-19 infections.
The device is built on standard resuscitator bags with sensors and alarms to support automated compressions and patient monitoring. The product has already obtained the Emergency Use Authorization (EUA) from the U.S. Food & Drug Administration and hence, can now be used during the COVID-19 public health emergency. Also, the company consulted Oregon Health & Science University emergency medicine clinicians for the development and testing of the device.
Fitbit is likely to gain from the new device backed by in-house expertise in advanced sensor development and hardware design, while maintaining regulatory compliance and obtaining EUA.
When all other major business segments of the company are facing hurdles during such uncertain times, Fitbit’s latest initiative seems strategic. Moreover, low cost of the device should lead to increase in sales figures. Also, it is expected to boost brand recognition and aid the stock’s performance in the days ahead.
Fitbit, Inc. Price and Consensus
Fitbit, Inc. price-consensus-chart | Fitbit, Inc. Quote
The global novel coronavirus pandemic has resulted in the shortage of key medical supplies, with hospitals clamoring for more ventilators and other equipment to fight the deadly virus.
Ventilator production is impeded by the restricted availability of exclusive tubes and valves that control air flow. These are typically developed in house by small specialist companies that supply them to medical-device players that assemble ventilators. This is constraining accelerated production of ventilators.
Therefore, in a bid to meet the growing demand for healthcare devices, Fitbit is making all efforts to lend a hand in the fight against COVID-19.
The company has been working with leading medical institutions, thereby helping researchers overcome major challenges and engage patients in better ways. It provides the corporate wellness program to entities like self-insured businesses, in turn boosting prospects.
The ventilator launch is in line with the company’s strategy of expanding its share in the healthcare sector and generating more recurring revenues.
Other electronic component manufacturers and even automakers are striving to develop ventilator devices to address the growing demand amid the coronavirus crisis. This bodes well for the overall healthcare system.
Zacks Rank and Stocks to Consider
Fitbit currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Wayfair Inc. W, eBay EBAY and Inphi Corporation IPHI. While Wayfair sports a Zacks Rank #1 (Strong Buy), both eBay and Inphi carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Wayfair, eBay, and Inphi is currently projected at 23%, 12.4% and 37.7%, respectively.
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