Fitbit's profitability is standing at a turning point, and this year's revenue is expected to reach $2.5 billion, and gross margin

Despite a 30% short-term float on Fitbit, the company may prove its flexibility in the wearables market. It has a broad product line and is limited in competition, currently from Garmin and Apple. Due to its strategic investment in R&D and marketing, Fitbit may prove to be a mistake.

Fitbit introduced several new products a year ago, and this year's sales will make investors stunned. On its official website, consumers have nine products to choose from. Two new products, Alta and Blaze, are aimed at the market for fashion wearables. Apple announced a price cut on March 21, and he strongly recommends that wearables face the weakness of the wearable market, despite initial speculation. Apple still solves the user's demand for fashion by offering a variety of choices for wristbands. Similarly, Fitbit's Blaze is priced at $249, which is $50 less than Apple Watch. The competitive threat of smart watches comes from Garmin. In the Engadget ranking, Garmin's vivosmart HR is considered the best health tracking device, followed by Fitbit.

Garmin has a technical advantage over Fitbit, which provides more accurate health data reporting. This is because Garmin uses GPS to measure, such as the distance traveled. According to Engadget, Garmin's user interface is more friendly than Fitbit.

Fitbit's research and development costs have tripled, and the number of employees has increased from 226 in 2014 to 624. By adjusting products to meet the needs of community users, the company's revenue should also improve over time. Active users of Fitbit increased from 6.7 million at the end of 2014 to 16.9 million today.

To support its global growth, Fitbit's sales and marketing experience has doubled. The global brand awareness of the company's products has increased, and it is hoped that Fitbit will reduce expenses but revenue will continue to grow.

Fitbit has signed ink supply agreements with some corporate employers, such as Wendy and the Christian Church, who will further build a health and moat.

Investors believe that Fitbit's stock is rebounding and is not eager to buy. The company benefited from strong growth last quarter. Holiday sales made its receivables increase by 92% in the fourth quarter, and gross profit margin increased to 48.8%, compared with a year-on-year increase of 45.9%. It is worth noting that costs are growing at a faster rate, up 139% from the previous year. However, its brand recognition is increasing and it is hoped that the cost will decrease.

Fitbit's operational risk is that it cannot compensate for overspending costs with better sales. In the fourth quarter, DSO (Daily Sales) jumped from 48 days (Q4 in 2014) to 56 days. Excess inventory may affect the current quarter. Fortunately, Fitbit has released this year's sales guide. It expects revenue to reach $2.5 billion this year and a gross margin of 49%.

Fitbit's profitability is standing at an inflection point. If the company's sales and marketing expenses can help it raise its brand awareness, its global revenue growth will accelerate. A wide product line allows Fitbit to flexibly adjust the product structure as needed.