What: Not only did Fitbit (NYSE:FIT) have a successful IPO in June, jumping 50% on the first day alone, the maker of wearable fitness trackers followed up with a strong gain in July to boot. Shares gained 25% last month, according to S&P Capital IQ data. There were several factors contributing to the move, including continued post-IPO hype as well as analysts initiating bullish coverage on Fitbit.

So what: For instance, R.W. Baird initiated coverage in early July, assigning an "outperform" rating and $52 price target on Fitbit, citing the company's brand dominance in "strong secular fitness trends." Just days later, SunTrust Robinson Humphrey, Piper Jaffray, Deutsche Bank, and Stifel Nicolaus expressed similarly bullish opinions to varying degrees, pegging price targets as high as $57.

Now what: In an interview with Fortune, Fitbit co-founder and CEO James Park also laid out a vision where future devices could integrate text messaging and other functions in order to boost engagement. Then, rival Garmin took a hit when it issued soft guidance, as the company acknowledged the intense competition developing in the fitness market where it participates with its own line of fitness trackers. In essence, Fitbit and Apple (NASDAQ: AAPL)are putting the heat on Garmin. Speaking of Apple, the Mac maker's new Apple Watch seemingly fell short of Street expectations, at least based on what little information the company provided. For now, Fitbit seems to be relatively insulated from Apple Watch.

While Fitbit enjoyed a good run in July, it's worth noting that the company just gave back much of those gains after reporting fiscal second quarter results. The company put up admirable growth rates in terms of revenue and devices sold, earnings guidance was a little light relative to consensus expectations and margins are under pressure. At the same time, shares had nearly hit $52 recently, representing massive gains compared to the $20 IPO price, so it's conceivable that the valuation was getting a little too optimistic and a pullback was coming.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.