Heading into Fitbit’s (FIT) third-quarter report Wednesday, research firm Pacific Crest said Monday that its checks on the company’s latest fitness trackers suggest favorable sales trends.

PACIFIC CREST SEES Q3 BEAT FOR FITBIT: Pacific Crest’s Brad Erickson said Monday that his checks indicate Fitbit Charge 2 run-rates improved from his last survey while inventory declined to 9.3 days from last month’s 14.4. Demand for the device is “building” but remains “in line with expectations,” with Erickson finding no evidence of outright inventory outages. His early read on the company’s Flex 2 suggests “volumes have been low both for supply and sell-through,” but the analyst refrained from extrapolating too quickly given that the Charge 2 is likely to be the focus this holiday. Net-net, Erickson expects Fitbit’s Q3 results to beat on both top and bottom lines, with the analyst commenting that the company’s seemingly conservative advertising efforts in the quarter “could translate to some earnings upside.” Despite the near-term bullishness, he keeps an Underweight rating on the stock in light of longer-term threats from market maturation and user churn.

PRICE ACTION: Shares of Fitbit are down 2.5% to $13.15 in afternoon trading. The company is slated to report Q3 results on the night of November 2.