Fad companies that peaked a few years ago are starting to show some life. Neither GoPro (NASDAQ:GPRO) nor Fitbit (NYSE:FIT) will ever revisit their glory years, they are still getting some buying interest in recent weeks. Investors should look at them as potential buyout candidates.
Reuters reported that Fitbit is considering selling itself. This might happen out of necessity. Smartwatches took over the stand-alone wearables, forcing Fitbit to expand globally to regain its relevance. But Apple (NASDAQ:AAPL) and Samsung are too much for Fitbit to take on.
The company still has $2.23 per share in cash on hand and has no debt. Still, its July forecast for the year is due to weak demand for its Versa Lite.
Amazon.com (NASDAQ:AMZN) could expand Alexa’s reach if its capabilities were added to Fitbit devices.
GoPro is also a potential buyout play. The action camera supplier is losing to smartphones that offer good enough photography and video capture. Still, a new camera announcement is a positive development.
As it continues to offer updated products with rich features in time for the holiday season, sales could rebound.
GoPro’s debt/equity profile is manageable but it is not debt-free. Don’t count GoPro out yet. Consumers are familiar with its brand and it has hardware updates that will help it capture more share of the $13 billion digital imaging business.
