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Based on news reports, the Western world may have taken more interest in fitness and health during the pandemic. Because it was theorized that excess weight affected survival chances, many individuals began to take their overall health more seriously.
In April, Insider Monkey provided some evidence that the “worldwide online/virtual fitness market” is expected to expand. They project a compound annual growth rate (CAGR) of nearly 37% between 2024 and 2027. Meanwhile, the home fitness equipment market is slated to expand at a CAGR of 10% between 2024 and 2027. Still further, the global market for sports and fitness clothing may increase at a CAGR of 5% between 2022 and 2030, possibly reaching $270 billion.
For investors who want to reap the rewards, let’s explore three of the top fitness stocks to buy.
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YETI (YETI)
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YETI (NYSE:YETI) sells products specially used on hikes and other outdoor excursions, such as hard and soft coolers, cargo, and bags. The company is continuing to benefit from the increased affinity for outdoor activities. In fact, many Americans acquired this sport during the pandemic, when most indoor social activities were prohibited.
The company’s revenue was flat last quarter. This was due to weak seasonality and the recall of its soft coolers due to a magnet detachment issue. However, it appears no injuries were sustained because of the coolers’ problems. So, the company began selling modified soft coolers again during the current quarter.
And despite the recall, Yeti’s direct-to-consumer channel sales increased 14% year over year (YOY) to $259.5 million, showing a surge in e-commerce.
Further encouraging news is a partnership with Tractor Supply (NASDAQ:TSO), a large retailer that focuses on rural customers. Some investors feel bullish on Yeti’s marketing strategy, which includes advertising on Netflix (NASDAQ:NFLX) and at golf courses and auto races.
Analysts, on average, expect the company’s earnings per share to jump to $2.70 in 2024 from $2.36 in 2022. And, its forward P/E ratio is a rather low 15.5, making it one of the best fitness stocks to buy.
lululemon Athletica (LULU)
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Lululemon (NASDAQ:LULU) continues to benefit from the rapidly growing popularity of yoga. Indeed, over the past five years, the number of Americans participating in the practice has jumped more than 50% to 36 million. In addition, the brand is well-loved as athleisure wear.
In a note to investors on Nov. 17, investment bank Truist started coverage of LULU stock with a buy rating. They cited the firm’s opportunities to benefit from the growth of its digital international, and men’s businesses.