You should look at these seven gym stocks if you're trying to invest in the fitness sector. These businesses, which range from high-end health clubs to low-cost chains, are expanding quickly and may be successful.
More people in America now consider going to the gym a way of life.
However, since 2020, when COVID-19 regulations have been in place, many people have chosen to utilize home exercise equipment, which has put a heavy burden on clubs.
One of the main sources of revenue for gyms all across the US, gym memberships, had a significant decline in the years 2020 to 2021.
People started exercising at home to keep in shape, which has been fantastic for certain fitness-related businesses but disastrous for most pure-play gym stocks.
For instance, despite the continuing epidemic, Apple Watch shipments rose 20% overall in the first half of 2021, home fitness equipment sales increased 170%, and downloads of fitness apps increased 46% globally.
Gyms like Town Sports International were declaring bankruptcy on the opposite side.
Because of this, fitness stock prices have increased at the cost of gym stock prices.
There is, nevertheless, hope.
Gym stocks may do better as the globe continues to recover from the worldwide epidemic.
Check out these seven fitness stocks that might profit from a market recovery.
For its first product line, global positioning system (GPS) navigational systems for vehicles were produced by Garmin (NASDAQ: GRMN). Today, personal fitness equipment, including smartwatches, fitness trackers, cycling power meters, and heart rate monitors, account for most of the company's income. As more individuals explore methods to improve their health, consumer demand for fitness trackers is rising.
Garmin anticipated that 2021 would be the sixth year company revenue has risen. The firm's management is making strong investments in R&D, guaranteeing that Garmin retains its market share gains while also entering new markets.
F45 Education (NYSE: FXLV)
You are just 45 minutes away from reaching your fitness objectives, according to the global fitness community F45 Training, which has over 1,750 facilities globally and 800 in the US alone.
To combine his love of personal training with 45-minute high-intensity workouts, Rob Deutsch founded it in 2012.
A 45-minute high-intensity interval class model was the centerpiece of the fitness studio that was intended to be created, and this studio was intended to be introduced into gyms worldwide.
Don't get it wrong, however.
The F45 is not very glitzy.
Peloton Treadmills, large boxing gloves, or heavy machinery are unavailable here.
Although the exercises are challenging, thousands of subscribers happily pay the steep membership price and attend weekly lessons.
F45 training, like most gyms during the pandemic, was severely harmed by the closure of several of its locations throughout the globe.
But for F45, 2021 has been a terrific year.
Visits and memberships have increased since gyms have reopened.
Its most recent financial report revealed a 24% growth in sales, driven by the ongoing establishment of additional franchise sites.
The business most recently revised its sales forecast for 2021.
This study will soon be available online, and according to F45, it anticipates an overall YoY revenue increase of 62% and 66%.
The quarter's exceptional success in light of the continuing pandemic was driven by sustained momentum in new franchise sales, strong equipment sales, and a continued positive recovery in-studio performance.
In early March, the business intends to announce its financial results for the fourth quarter and fiscal year 2021.
It might be wise to keep a watch on this pure-play gym stock.
Lifetime Fitness (NYSE: LTH)
Lifetime Fitness has transformed the fitness industry by introducing the "total-member" idea, which goes beyond just offering top-notch workouts.
In 41 significant areas in the US and Canada, this publicly traded firm from Eden Prairie, Minnesota, runs more than 150 sports, fitness, and family leisure facilities.
Since 2000, several of these gyms have been operating, and the majority continue to increase their member bases.
The business also owns opulent resorts for athletes and is growing its brand by leasing opulent homes.
Lifetime Fitness offers extras like fitness training, sports, and other activities, in contrast to other clubs that simply provide the essentials.
According to the company's most recent financial report, sales increased by 33%, from $719 million to $957 million.
And despite the tightened restrictions caused by the late-year outbreak of the Omicron virus, center memberships nevertheless rose by 16.38%.
Finally, Lifetime signed a non-binding LOI for the sales-leaseback of its assets in March, valued at $175 million, to further improve its financial sheets.
Lifetime Fitness seems to be on the right road, given that it has 1.7 million lifetime members, $2 billion in real estate, and 19 million group fitness members.
Lululemon Sports (NASDAQ: LULU)
There is no denying that Americans are becoming more health concerned; consequently, there is a growing demand for workout gear and gym memberships.
Fitness-related equities, such as Lululemon Athletica, have increased in popularity.
One of the top companies in the fiercely contested fitness gear sector is Lululemon.
Consumers concerned about their health have a strong brand identification for the business and are committed to it.
Although its items are expensive, consumers continue to purchase them in large quantities.
The recent increase in Lululemon's sales and profits has been remarkable.
The firm increased its sales and gross margin when many other clothing businesses collapsed during the COVID crisis.
The company, primarily known for its yoga trousers, has succeeded with its online store.
The company's revenue is predicted to improve significantly from pre-pandemic levels in 2021, rising to more than $6 billion from $3.9 billion.
Lululemon's retail operations are again operating at full capacity, and the chain's number of outlets is expanding.
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Lululemon is an excellent business overall, with a proven track record and promising future growth.
Although the stock may be pricey, it may be worth considering if you're trying to invest in the fitness gear industry.
The Hain Celestial Group (NASDAQ: HAIN)
With stores in more than 80 countries, The Hain Celestial Group, Inc. (NASDAQ: HAIN) is a global retailer of organic and natural goods. The food producer's headquarters in New York is ranked ninth on our list of the top 10 fitness stocks.
Under the names Health Valley, Celestial Seasonings, Terra Chips, The Greek God, and Yves, the healthy food merchant is well-known for its weight-management goods. Rob Dickerson from Jefferies kept the shares of The Hain Celestial Group, Inc. (NASDAQ: HAIN) with a Hold rating on September 29. Dickerson raised his price objective for the stock from $41 to $46 because he believes the company's plant-based food and beverage business has promise.
In addition, 26 hedge funds, up from 23 in the first quarter of 2021, are long The Hain Celestial Group, Inc. (NASDAQ: HAIN), increasing the number of hedge funds long the food retailer's shares. Over the previous year, the stock increased by 28%.
Worldwide Web Inc. (NASDAQ: WW)
Digital weight management service provider WW International, Inc. (NASDAQ: WW) is seventh on our list of the top 10 fitness stocks to buy. Through its app, the New York-based business provides individualized counseling and services for weight control. WW International, Inc. (NASDAQ: WW) reported $272.9 million in subscription revenue as of the second quarter, with 4.9 million end-of-period customers.
The e-commerce platform used by the digital fitness startup also allows it to sell its consumer health items, like snacks and kitchenware. Sales of products generated $38.5 million in revenue for WW International, Inc. (NASDAQ: WW) in the second quarter. On September 30, Citi's Wendy Nicholson maintained a Buy rating and a $32 price target on WW International, Inc. (NASDAQ: WW). The analyst predicts that the stock in digital fitness will have a successful year in 2022.
With a $102 million stake, Miller Value Partners is the company's largest shareholder as of the second quarter. At the end of June 2021, 27 of the 873 top funds Insider Monkey monitors reported holding shares of the New York-based business.
Fitness Planet (NYSE: PLNT)
One of the few pure-play gym companies on the US Market, Planet Fitness Inc., comes in at number one on our list.
Together with its franchisees and subsidiaries, Planet Fitness owns and runs more than 2,000 fitness centers that provide personal trainer services, massage rooms, branded merchandise, focus exercises, and other amenities.
Planet Fitness, which opened its doors in 1992, credits its extensive client base to its "judgment-free zone" approach, which makes even novices feel welcome.
Since March 2020, when the shares fell from $88 to a low of $24 while rivals like Gold's Gym declared bankruptcy, a low-cost strategy has managed to keep this firm viable.
Since then, 22% of US gyms have closed their doors, yet none of the Planet Fitness franchisees have.
Planet Fitness has high profits since its franchising component is capital-light and has manageable debt.
More individuals are returning to the gym to break up the routine of working out at home as COVID rules loosen up around the nation.
Planet Fitness may be in a strong position to increase its market share once a number of its competitors close their doors permanently.
Following a better-than-expected performance in the summer of 2021, management increased its anticipation for store openings.
Additionally, the corporation obtained $900 million via a debt offering to finance certain areas of its expanding business.
This includes paying for the percentage of Sunshine Fitness's purchase.
More than 100 more venues might be added to its portfolio with the $800 million deal.
Nautilus (NASDAQ: NLS)
Nautilus was a well-known brand before Peloton.
This company creates, develops, sources, sells, and distributes a variety of fitness items both domestically and internationally.
It provides services to customers and fitness clubs through its own direct sales team, independent partners, and as one of the biggest beneficiaries of the COVID-19 standards.
Nautilus could swiftly stand back up because of the expansion of the work-from-home trend.
Although gyms are beginning to reopen, Nautilus' financial situation is stable.
The business had a far better year last year, shipping its most items and seeing a 41% rise in net revenues.
Through its JRNY app, the business is becoming a heavily dependent digital platform corporation.
The fitness levels of each member are evaluated using this software, which also offers tailored exercises.
According to its most recent report, this is a paid membership, and the app almost hit 250,000 subscribers last year.
The firm wants 300,000 subscribers by the beginning of this year.
The Nautilus stock might soar if it is successful.
Peloton Interactive Stock (NASDAQ: PTON)
The company Peloton Interactive, Inc. sells workout equipment and related services.
Recently, the business has drawn a lot of attention for its workout cycle with an interactive screen that enables customers to participate in online sessions at home, at the gym, or anywhere they like using a Peloton Bike.
The Peloton bike costs a premium price and has expensive monthly membership fees, but that hasn't prevented its 4.4 million customers from purchasing one. The current price of $2,945 also comes with a $39 monthly subscription fee that can be paid with debit and credit cards.
The business performed so successfully that, according to its financial reports for the most recent quarter, the number of subscribers to Connected Fitness increased to almost 1.67 million.
The home gym industry flourished during the outbreak since most people were confined to their homes.
Although the epidemic has passed and gyms have reopened, the industry has not continued to develop at the same pace.
When it couldn't meet demand in 2020, Peloton planned to discontinue manufacturing equipment this year, according to an internal business letter seen by reporters.
To aid with the $800 million cost-cutting, the company's CEO resigned and prepared to fire 2800 people.
Even while this could seem to be a death spiral, its share price wasn't displaying the same pattern.
Even after these statements, the company's share price increased by an astounding 51% for various factors.
First, it was said that Amazon and Nike were interested in buying the industry leader in home gyms.
Second, the former CFO of Netflix and Spotify executive Barry McCarthy took over as the company's CEO.
Athletic Stocks
The company Absolute Health and Fitness (OTCMKTS: AHFI)
Absolute Health and Fitness, Inc., a holding company, does business via Absolute Health and Fitness, LLC, a subsidiary.
The corporation is involved in the construction and management of fitness facilities in the US.
Under the Absolute Fitness brand, it owns and manages fitness facilities.
Additionally, it offers personal training, spinning, Pilates, and yoga courses.
Additionally, the business provides weight reduction programs and dietary advice.
Market capitalization for Absolute Health and Fitness is $3.71 million, with an average volume of around 21,000 shares.
Despite being a micro-cap firm, this one presents a special chance for those in the fitness sector.
Keep a careful watch on this penny stock since it can be a growth opportunity.
Should You Buy Gyms Stocks?
Due to the bearish market, buying gym stock might result in good profits if the sector recovers.
Investors seeking possibly inexpensive companies may get interested in this.
However, buying a gym or fitness stock carries a risk like any investment.
Therefore, before purchasing any stocks, even those on our list, conduct your research.
Gym Stocks: Concluding Remarks
Gym stocks provide an exceptional chance to invest in a sector that could be ready to regain market share lost to the epidemic.
If trends persist and individuals become more at ease returning to open gyms, we could see a turnaround.
Still, there are no assurances on the stock market, even if they can have promise as a successful investment instrument.
Do your research, and never risk money you can't afford to lose.
FAQ on Gym Stocks
Continue reading to answer some of the most frequent queries regarding buying gym stock.
There are several gyms with stock that is traded openly.
On significant markets, shares of some of the world's biggest and best-known gym chains are traded, including Planet Fitness, Lifetime, and F45.
Is Planet Fitness a wise investment in stock?
There is no universally applicable response to this question since gym stock performance varies from business to company.
However, many folks have Planet Fitness on their shortlist since it is a large, well-respected gym with a good track record.
Are Gyms Stocks a Safe Investment?
"Safe" is a relative phrase in the world of investing; there are no safe stocks in the strictest sense.
Many people see gym stocks as pretty safe investments before the COVID-19 outbreak since it was a business that grew quite steadily.
If you are a gym market bear, you may consider investing in clothing firms since they could do well despite external market challenges.
What Are the Risks Associated with Buying Gym Stocks?
The primary risk of investing in gym stock is that due to the extremely cyclical nature of the fitness sector, businesses may suddenly transition from lucrative to unprofitable.
In addition, a business might file for bankruptcy, resulting in the loss of investor money.
Depending on the specific firm, investing in gym stocks may provide a variety of profits.
However, several gym stocks have seen significant gains.
For instance, the price of Planet Fitness stock has increased by more than 80% during the last five years.
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