Investing

Nautilus, Inc (NYSE:NLS): Home Exercise During Next Winter Lockdowns

Home fitness equipment supplier Nautilus (NYSE:NLS) reported record revenue growth during the past year. After a huge initial surge during the start of the pandemic Nautilus is still up 200 percent but the stock seems to be cheap at these levels.

As people increasingly start to return to the gym the pandemic boosted sales of the home fitness equipment company should tank. However, there seems to have been a lasting effect of the lockdowns on the behaviour of people, as many people get used to the idea of staying home. According to the guidance of the company current sales could be overblown, but also portray the potential for home fitness equipment to become increasingly conventional. And while big brother Peleton (NDQ:PTON) is overvalued with a triple digit P/E-ratio, Nautilus has got a forward P/E ratio of 10, which shows that there is much more room for growth. Under current market circumstances Nautilus could outperform as other better known stocks tend to be overvalued.

New Lockdowns Could Offset Exponential Gains For Nautilus

As the western world gets increasingly vaccinated, hospitality rates are much lower than in the previous years. However, many governments are still cautious with completely opening-up their economies. This means that people will be home more and have more spare time available, especially as working-from-home seems to become the standard. This is a chance for a company like Nautilus to profit even more from the current pandemic. As the future is uncertain and new strains of the virus could undermine the protective effect of the vaccine, the next winter period will show whether current sales of home fitness equipment will continue to boost revenue and net income for Nautilus.

Crystal Clear Business Strategy Will Prove Lucrative

Currently, like Peleton, Nautilus is developing a connected fitness platform for their clients. However, by being primarily focused on consumers Nautilus is more affected by shifts in economic circumstances. But it should be noted that Nautilus equipment is significantly cheaper than Peleton’s expensive equipment. Nautilus is clear about their plans to dominate the consumer home fitness market with their affordable equipment. Along with their innovative JRNY platform current high growth could be just the beginning of a longer run up in the next years. For long term stock holders looking to diversify their portfolio with a cheap stock that offers some protection against pandemic-related burdens, Nautilus (NYSE:NLS) is the way to go.

Nautilus ended the latest quarter with $113 million in cash and equivalents and with less than $14 million of debt this company has one of the healthiest balance sheets out there. Therefore, The Golden Investor is extremely bullish on this pandemic-proof fitness stock.

Disclaimer: The writer of this article holds Nautilus (NYSE:NLS) stock, this article should not be interpreted as investment advice or anything like that.

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