“My Sharona” by The Knack.

“Turning Japanese” by The Vapors.

“Groove Is in the Heart” by Deee-Lite.

In the music industry, we call them “one-hit wonders.” The artist notches a big winner, then disappears.

In the technology sector, such a fate often befalls tech companies, too. Only we call them “one-product wonders.”

They design items that go from being all the rage (Palm digital organizers or Blackberry smartphones, for example) to almost non-existent, if not completely extinct.

Ditto for their stock prices.
Well, we’ve got our next two big candidates in the tech world…

Reality Bites!

Writing in Barron’s, Alexander Eule argues that point-of-view camera maker GoPro Inc. (GPRO) is the next tech company to earn this illustrious distinction.

If he’s right, shares are in for a nasty downturn.

But I’m convinced that Fitbit Inc. (FIT) could just as easily beat GoPro to it. Here’s why…

When Fitbit shares debuted in mid-June, the usual IPO hype propelled the stock to a peak of $51.90 in August.

But as is usually the case, reality quickly set in and the price came crashing back down to a low of $31.25 in September.

Analysts swear that the pullback is a great buying opportunity. In fact, both FBN Securities and Morgan Stanley (MS) recently pounded the table and called for lofty price targets of $50 and $58, respectively.

I couldn’t disagree more.

At current prices, Fitbit is anything but a bargain.

Shares currently trade hands at nearly 40 times forward earnings and six times sales. Yet, the average stock in the S&P 500 trades at 17.6 times earnings and 1.7 times sales.

Can you say “overvalued”?

Granted, companies growing at above-average rates should command premium multiples. And Fitbit definitely falls into that category. In the last quarter, year-over-year sales blasted 252% higher.