Shares of Fitbit rose 3 percent Thursday morning after analysts at Wedbush Securities began coverage of the stock with a positive view.
Wedbush initiated Fitbit with a "buy" rating and a price target of $18, saying "we believe that Fitbit shares are currently undervalued given a long runway remaining from an installed base perspective, as well as relatively untapped accessory, co-branding, and corporate wellness opportunities."
"We believe that these positive factors outweigh the risk of commoditization over the next few years and a seemingly slowing pace of technological innovation," they said in a Wednesday note to clients.
Fitbit is the leader by market share in fitness trackers, but has recently faced concerns over its products' accuracy. The stock traded near $14.50 on Thursday.
Entering Thursday's session, Fitbit shares had gained more than 6.5 percent over the past three months, but were still more than 50 percent lower for the year.
FIT year-to-date chartSource: FactSet
Disclosure: Wedbush makes a market in Fitbit stock.