Bicycles have been around for more than 200 years now and were far from a high-growth sector before 2020. But then COVID-19 occurred, and bike sales surged during the epidemic. According to National Bike Dealers Association statistics, bicycle sales surged by over 30% in 2020, and sales grew another 15% for the 12 months ending in July 2021. A persistent change in global consumer behavior implies bike sales might stay high for years.
According to some projections, bicycle sales might climb by an average of 7% each year until the end of this decade. Factors propelling sales include a rising interest in fitness and wellbeing, more time spent outside, environmental conscience, and bike-sharing technology. Stocks that play a role in this fast booming sector might provide an investing opportunity.
During the last few months, cycling has been a very popular hobby, notably during the corona epidemic. The illness that infected the planet in 2019 has pushed us to our limits. However, few activities, including mountain biking, were in full and proper motion throughout the epidemic. The demand for mountain bikes has surged over the last two years due to an increase in riding activities. Here are the best mountain bike stocks to buy in 2022 if you are an investor wanting to make a purchase.
What is a mountain bike?
A mountain bike or mountain bicycle is a bicycle designed for cycling off-road. Mountain bikes are comparable to regular bicycles in some respects, but they are equipped with characteristics meant to improve their performance over difficult terrain. Typical components include a suspension fork, huge knobby tires, more durable wheels, stronger brakes, straight handlebars, lower gear ratios for climbing steep climbs, and sometimes rear suspension to truly smooth out the trail. Mountain bikes are typically designed for usage on mountain trails, single track, fire roads, and other unpaved terrain, while "mountain-bike" frames make up the majority of available bikes.
Typical mountain riding terrain includes rocks, roots, loose soil, and steep inclines. Numerous trails have Technical Trail Features (TTFs), such as log piles, log rides, rock gardens, skinnies, gap jumps, and wall rides. Mountain bikes are designed to tackle this terrain and its features. This model of bicycle has gained popularity among urban cyclists and couriers who must overcome potholes and curbs due to its durable build, stronger rims, and bigger tires. Since the emergence of mountain biking as a sport in the 1970s, numerous new subtypes have emerged, including cross-country (XC), enduro/all-mountain, freeride, downhill, and various track and slalom kinds. Each of these situations places unique demands on the bike, necessitating distinct designs for best performance.
The evolution of mountain bikes has resulted in an increase in suspension travel, which is now commonly up to 8 inches (200 mm), and gearing up to 27 speeds to allow climbing and quick descents. A "1x" (pronounced "one-by") trend has emerged as a result of advancements in gearing, simplifying the gearing to one chainring in the front and a cassette at the rear, often with 9 to 12 sprockets. The terms "all-terrain bicycle," "all-terrain bike," and the acronym "ATB" are used interchangeably with "mountain bike," but other authors believe them to be obsolete.
Coronavirus has affected the majority of the travel and leisure business. However, other activities, such as biking, are thriving. Because it can be done outside while adhering to social distance regulations, people can explore their environment and exercise while riding bicycles, even during a coronavirus epidemic.
The Guardian reports that the coronavirus has led to a 50 to 100 percent increase in bike riding in key US cities over the past few months. Given the number of activities that have been canceled, it is logical that the small number of activities that remain safe are seeing exponential growth.
Bicycles play a key role in the transportation business, whether they are used for outdoor recreation, short-distance commuting, or sports events. The epidemic has made this kind of human migration a potential growing theme in the next few years.
Keep in mind that the surging sales during the pandemic's onset are unlikely to persist. This slowdown could lead to some volatility in bike stock stocks. Nonetheless, a projected average annual growth rate in the upper single digits for the next decade or so hardly causes alarm. Investing in bicycles may be a profitable theme to pursue.
We can confidently refer to 2020 as the "Year of Discovering Hobbies." For some, this was as simple as watching the new Netflix series (Nasdaq: NFLX). For others, it may have necessitated mastering a totally new skill. However, for many, this meant dusting off their bike and lubricating the chain. With no open gyms and hours of free time, riding was the perfect solution:
It allowed you to leave the house.
It got you some exercise.
It provides a delightful hobby that is socially distant.
During the epidemic, mountain bicycle sales increased for these and other reasons. Consequently, investors have been searching for bike stocks to purchase.
According to the NPD Group, bicycle sales increased 57 percent year-over-year from March 20, 2020, to April 21, 2021. Given that mountain bikes had existed since the 1800s, this was a significant increase. Total sales for combined large-format and specialist merchants hit $6.5 billion.
Even better is the fact that this trend does not appear to be abating. When the quarantine was originally implemented, you might have anticipated a rush to purchase mountain bikes. However, after this first surge, you would anticipate a sales decline, which appears not to be the case.
Compared to April 2019, bike sales in April 2021 increased by 54 percent. This indicates that sales are still increasing significantly, and this is true despite the absence of a purchasing frenzy during the pandemic. March 2021 was also the best month ever recorded for bike sales (again, according to NPD Tracking Service data).
1. Dick's Sporting Goods (NYSE: DKS)
If you are in the market for a new mountain bike, Dick's Sporting Goods is likely to be your first destination. In fact, it is likely your first visit for all sports-related information. This enormous store has demonstrated remarkable resilience in the face of both the epidemic and the growth of e-commerce. In 2021, Dick's generated $9.58 billion in revenue. And a net income of $530,000,000.
Dick's has benefited from the increase in outdoor activities caused by pandemic lockdowns. As with riding, though, this trend has not slowed. In fact, over two years after the announcement of the first lockdowns, Dick's recorded its greatest quarter ever, with earnings per share of $4.53. This was a 45 percent increase over 2020. And the growth of 260 percent from 2019.
In part, Dick's success can be attributed to its omnichannel experience. Dick's has done an exceptional job integrating its e-commerce offerings with a physical presence. This indicates that clients can place orders online. However, customers may return it to Dick's store if they prefer. Customers can choose to pick up their online order from Dick's location if it is more convenient. These small improvements significantly enhance the client experience. Making it easy to purchase or return things can be a significant competitive advantage. This was reflected in Dick's most recent quarterly financial report.
2. Deckers Outdoor Corp (NYSE: DECK)
Deckers Outdoor Corp stock, which is valued at $405, has increased consistently over the past year. Prior to a year ago, the stock was valued at approximately $206 per share. Therefore the increase has been remarkable. This provides one conceivable and advantageous reason to invest in the company's shares today.
Moreover, Deckers has a solid market capitalization, and it has a daily range of $400 to $411 and a market value of $11.22 billion. In addition, the company's 52-week range is $193 to $411. These are solid, credible numbers.
In the past year, DECK stock has had a spectacular run. Forecasts for the company's shares indicate a similar trajectory. There are few significant explanations for this. One is that the corona pandemic could loom within the next year or so. As a result, individuals will continue to engage in riding and other activities despite restrictions on outdoor activities. Bicycling, and thus bicycles, will be in great demand.
DECK is selling at a price that is 95 percent over its 52-week high-low range, which is a solid incentive to purchase the shares today. In 2021, DECK was an excellent overall choice among mountain bike stocks to invest in.
3. Fox Factory Holding Corp. (NASDAQ: FOXF)
Consider Fox Factory Holding Corporation shares. In the past year, the company's stock price increased significantly. The company's stock price began at $90 a year ago and is now $164, representing a considerable and modest gain.
Fox Factory Holdings Corporation has a substantial market capitalization of $6.882 billion. Its daily range is $157 to $165, while its 52-week range is $70 to $167. These are commendable figures.
Currently, Fox designs, engineers, and manufactures the best mountain bikes in the world. They have some of the most market-defying products and virtually unrivaled systems.
In addition, they provide a variety of bicycles, including side-by-side vehicles, on-road vehicles, specialty vehicles, and many others, thereby expanding their market position and size.
In addition, some of the company's products are built for worldwide competition and network, which keeps their stock price volatile and gaining speed.
Fox Factory Holding Corp. (NASDAQ: FOXF) reported earnings of $1.05 per share for the first quarter of 2021 on May 6, surpassing analyst estimates by $0.23. Additionally, this period's revenue was approximately $281, which was $53 greater than the same period last year.
Fox Factory has been a formidable competitor in the mountain bike stock market. The company manufactures both off-road and on-road bicycles that are almost always of good quality. Fox experienced rapid expansion amid Covid-19 shutdowns. What worked to their benefit was their ability to adjust production capacity to match OEMs' strong demand, which resulted in increased revenues and profits. FOXF is anticipated to perform well in the upcoming year based on market trends that are anticipated to persist through 2022. FOXF is a highly wise and profitable investor in mountain bike stocks this year.
4. Giant Group Ltd. (OTCM: GGLT)
A share of Giant Group Ltd. is valued at $400. The value of the company's stock, which was $260 a year ago, has increased significantly over the past year. This is a solid indication of why you should invest in the company's shares today. Giant produces superior bicycles, and their bicycles are renowned for their durability and toughness, and they are not susceptible to wear or tear. In addition, Giant has a market capitalization of $6,133 million and a 52-week trading range of 46-400. Both are meaningful numbers.
Giant has traditionally been a mountain bike market leader, and their production capability favors more than numerous or numerous. Despite intense competition, Giant has been performing well on the exchange. With a year-over-year increase in its stock price, there is reason to believe in the company's future as well. The products of Giant Group are appealing and more of a one-time investment.
In addition to the aforementioned mountain bike stocks to invest in for 2021, there are more opportunities. Deckers, Fox, and Giant Group are suggested the most.
5. Halfords Group
Together with its Tredz subsidiary, Halfords Group is the largest automotive and cycling retailer in the United Kingdom. Halfords Group, like the other corporations on this list, was not a growing business in the years running up to 2020. The epidemic caused an increase in business for the company, and it reported record revenues and a significant return to profitability in 2021.
In 2018, Halfords Group initiated a concentrated attempt to expand its online sales and concentrate on its core goods. So far, the strategy has been profitable. Early in 2021, the firm also introduced its own e-scooter and e-bike brand, Carrera, as it retooled its products for a new generation of cycling and auto aficionados.
Do not expect this company to have rapid growth. But if bicycles continue to be popular, Halfords Group might be a long-term industry winner.
6. Shimano
Shimano, a Japanese manufacturing group, is an industry leader in outdoor equipment. Its components can be found on a wide range of road bike models, from entry-level to the most expensive. From brakes to cranksets, Shimano is a significant provider of bicycle components.
Traditionally a sluggish and stable manufacturing enterprise, Shimano's revenues have accelerated over the previous two years. Suppose you're looking for a strategy to capitalize on the resurgence of interest in bicycles, electric bikes (e-bikes), and related outdoor equipment. In that case, this firm should be one of the most profitable long-term investments.
7. Vista Outdoor
If you're an avid outdoor enthusiast, there's a high chance you own some Vista Outdoor items. CamelBak, Bushnell, Camp Chef, and Remington are the organization's subsidiaries. In addition to accessories, Vista Outdoor owns the QuietKat e-bike brand, a popular option for commuters seeking a greener and more efficient mode of transportation.
Like Shimano, Vista Outdoor has a history of being slow and steady. During the years running up to the pandemic, sales had struggled to gain traction. Since 2020, however, the demand for outdoor bikes and bicycles has rapidly changed the fortunes of this little business. If bicycles continue to be popular, it might be advantageous for Vista Outdoor and its stockholders.
8. Peloton (Nasdaq: PTON)
Peloton reported revenue of $4.02 billion for the fiscal year 2021. I didn't buy a Peloton. Clearly, however, others did. Since 2018, annual revenue has increased by a staggering 107 percent. During the pandemic, an increase in cases did not affect this average. Peloton has effectively doubled its annual income for the past four years.
Peloton is also establishing a linked exercise environment. When you purchase a Peloton, you gain membership to a community. You can engage in friendly competition in the Peloton community, gain access to lessons, and converse with others. You become, so to speak, a member of the club. Such a devoted group can generate word-of-mouth advertising. And that is an extremely potent instrument.
Each time Peloton gains a new community member and it gains a brand ambassador. This new member will likely inform their friends of their decision. And their pals will likely learn why they enjoy it. Members can serve as unpaid sales representatives. And they have demonstrated the capacity to "sell" Peloton to their peers.
In Q4 2021, Peloton's paid subscriptions climbed by 176 percent. There are approximately 5.9 million members of Peloton. And 874,000 of them are regular contributors. This resulted in quarterly subscription revenue of $281,6 million. Due to the lower pricing of their bicycles, Peloton anticipates a minor decline in short-term profitability moving ahead. However, the leadership team thinks that this price reduction will make bicycles more accessible. In turn, this can lead to a larger community and more stable membership subscription revenue.
In 2021, Peloton's stock was 41 percent lower. This only affords investors the opportunity to purchase a dip in one of the greatest bike stocks on the market. The bike may not move at all. However, the stock is prepared to move.
Final thoughts
You must invest in mountain bikes if you are an investor looking to do so. Additionally, if you wish to invest in mountain bike stocks, you should. Due to covid-19 worries looming in the following years, the increase in mountain biking and other activities will continue. This will result in an increase in demand for mountain bikes, giving mountain bike stocks a boost in the long run. Once you invest in these stocks and give them some time, you will unquestionably realize a return.
The final piece of advice for mountain bike stock investors is that if you choose to invest in mountain bikes, you must first evaluate a few mountain bike characteristics. You should seek out manufacturers of bikes that demonstrate durability, sturdiness, and the amount of time they can be used without deterioration. Before investing, you should also evaluate the market's perception of these bicycles.
Even though there are a handful of good mountain bike stocks to invest in today, the aforementioned firms and their stocks are suggested. You can invest in them with the expectation of maximizing your return in a short period of time.
Real-time News
