RBC Capital Markets doesn't think Fitbits are a fad.

Analysts at the firm initiated coverage of the maker of fitness trackers with an "Outperform" rating and a $45 price target in a note on Tuesday.

Fitbit went public on June 19, and on Tuesday afternoon the stock was trading at around $36.50 per share, up almost 10 percent from its closing price on Monday.

The firm's main argument is that smartwatches, like the Apple Watch, are an aspirational product that only a few people can afford or want to try out.

But fitness trackers, specifically Fitbit's, are quickly expanding their market share with people who just want a neat way of tracking their physical activity and sleep.

In its note, RBC writes:

Our proprietary survey indicates a growing interest in Fitbit products (Surge, Charge, Charge HR) vs. Apple Watch, as well as other activity/fitness trackers such as Jawbone, Garmin, and others. Pricing remains a factor in decision making, coupled with battery-life and smartphone-independent GPS-tracking, broader platform and social engagement are some of the factors that appeal to consumers.

That's not to say that both products are in the same league.

The analysts note that, of course, there's a big price gap between these products. At the lowest end of the range, the Fitbit Zip goes for about $50 on Amazon, while the cheapest Apple Watch costs $350.

Also, the kind of person likely to buy a full-featured smartwatch is slightly different from the person getting just a fitness tracker, they note.

However, Fitbit is quickly growing in the wellness category that's a direct play for Apple Watch.

"Fitbit, with its strong brand, has grown faster than the market and is the clear market leader (~85% fitness tracker)," the analysts wrote. "We see Fitbit growing into a wellness tech platform in a category that’s broader than wearables."

RBC further wrote: "The fluid wearables technology market, currently about $25B may grow to $50B over the long-term. A broadening ecosystem, international, and corporate wellness growth may enable Fitbit to reach ~$2.3B in revs. in CY17E, a +45 percent [compound annual growth rate]."

Here's a chart from RBC's survey showing which devices are in demand:

And this is how Fitbit's stock has traded since June 19 when the company went public:

--This story first appeared on Business Insider.

Published on: Jul 1, 2015