The shares of Synchrony Financial (NYSE:SYF) and Fitbit, Inc. (NYSE:FIT) were among the active stocks of the last trading sessions. Synchrony Financial (NYSE:SYF) soared to 0.48% closing at the price of $27.48 whereas the shares of Fitbit, Inc. (NYSE:FIT) soared 0.79% with the increase of 0.05 points closing at the price of $6.36. Synchrony Financial has currently decrease -19.44% in its stock over the period of 6-months while its rival Fitbit, Inc. added 22.07% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Synchrony Financial (NYSE:SYF) is 24.2% while the ROI of Fitbit, Inc. (NYSE:FIT) is -28.9%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, SYF’s EBITDA Margin is NOT AVAILABLE whereas FIT’s is -4.25.
Both the profitability ratios suggest that Synchrony Financial (NYSE:SYF) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Synchrony Financial (NYSE:SYF) reported $0.91/share EPS for the previous quarter where analysts were predicting an EPS to be $0.8/share Thus beating the analyst Estimates with a Surprise Factor of 13.7 Percent. While, Fitbit, Inc. (NYSE:FIT) reported EPS of $0.04/share in the last quarter. The analysts projected EPS of $-0.01/share depicting a Surprise of 500 Percent.
Taking a look at Earnings per Share, Fitbit, Inc. tends to be beating the analyst estimates more than Synchrony Financial. so FIT is more profitable than SYF.
Technical Analysis of Synchrony Financial & Fitbit, Inc.
Moving average convergence divergence (MACD) shows that Synchrony Financial (NYSE:SYF) is on a PRICE RELATIVITY trend While Fitbit, Inc. (NYSE:FIT) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Synchrony Financial was in BEARISH territory and Fitbit, Inc. was in BULLISH territory.
SYF’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While FIT’s candle is BULLISH with HIGH.
EPS Growth Rate: SYF’s 22.2% versus FIT’s 10.5%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Synchrony Financial (NYSE:SYF) is predicted at 22.2% while Fitbit, Inc. (NYSE:FIT) stands at 10.5%. These numbers suggest that SYF is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of SYF stands at 0 while FIT is at 1.9 whereas the debt ratio of the prior is 1.7 while the debt ratio of the later is 0.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.1 for SYF and 2.8 for FIT which means SYF has Hold rating whereas FIT has Hold rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for SYF is $38.43 which is 28.49% of its current price while FIT has price target of 6.5 which is 2.15% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
SYF currently has price to earning P/E ratio of 8.2 whereas FIT has 0 while the forward P/E ratio for the prior stands at 6.16 and for the later it depicts the value of 0.
The price to Book P/B for SYF is 1.44, Price to Sale is at 1.26 and for FIT these ratios stand at 2.27 and 1.01.