Leerink Now More Confident In Fitbit Outlook After Speaking With This CEO

• Fitbit Inc (NYSE: FIT) shares declined 14.45 percent over the past three months, from a high of $51.64 on August 5.
• Leerink’s Steven Wardell has maintained an Outperform rating on the company.
• Wardell expressed increased confidence in the expectations for Fitbit, following a meeting with the CEO of a wearables firm who is also a MEDACorp specialist with experience in mobile security and privacy issues.

Analyst Steven Wardell believes that “the Fitbit vulnerability is not a show-stopper for Fitbit and that the security researchers did not use a Fitbit tracker to infect a PC with malware, consistent with Fitbit's denial.”

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Wardell also believes that the vulnerability is similar to the general security issues being faced within the wearables segment, rather than being unique to the company. The vulnerabilities are unlikely to be a hurdle to the continued growth of this sector or discourage individuals and enterprises from buying Fitbit’s products.

Fitbit’s security vulnerability was revealed at the Hack.LU conference in Luxembourg, where it was shown that the “vulnerability allows a hacker to infect a Fitbit tracker with malware.” Some reports also suggested that the hack was able to infect a connected PC, which was denied by the company.

“Our research finds that the security researcher does not claim to have infected a connected PC with malware, which is consistent with Fitbit's denial,” Wardell explained, mentioning that the specialist also indicated that it would be “very challenging to achieve a damaging infection of a PC by this method.”

While the wearables sector appears to be facing various systemic IT security issues, leading manufacturers like Fitbit “need to commit to the IT security of their users and follow evolving security best practices.”