Nautilus, Inc. NLS has not received the same amount of love during the coronavirus as Peloton PTON and others. Yet NLS stock has crushed Peloton in 2020, despite its early November selloff, and its portfolio of home-gym offerings is more diverse.

More importantly, the company’s outlook remains strong and some of its other fundamentals help make it a cheap stock that might be worth buying as Apple AAPL and other firms bet on the future of digital-focused fitness.

Home-Gym Growth

Nautilus is one of the legacy players in the home-workout industry that Peloton has thrived in during the pandemic. The firm’s portfolio of home-gym equipment includes Bowflex, Nautilus, Octane Fitness, and Schwinn. These offerings feature free weights, treadmills, ellipticals, indoor cycling equipment, and more. This helps make it a more diverse firm than Peloton, which only sells treadmills and stationary bikes.

NLS beat our third earnings and revenue estimates on November 9. The company’s gross profit soared over 255%, with sales up 152% to $155 million. Investors should note that this top-line growth outpaced Q2’s 94% sales expansion and Q1’s 11. And it was able to grow both its DTC and in-store sales, with direct up 277% and retail up 108%.

Nautilus entered the fourth quarter with a backlog of $72.8 million, as it races to bolster its production in order to keep up with demand. On top of that, Nautilus CEO Jim Barr, who took over the firm last summer, came in with a plan to push into the connected workout space. And these efforts have paid off during the coronavirus, as gyms around North America remain closed or at limited capacity.

 

 

 

 

 

 

 

 

 

 

What Else

Nautilus has rolled out new products with “immersive digital” capabilities via connected monitors, which is key as people look to find on-demand digital workout classes at home. This includes its newer membership-based digital cardio offering called JRNY. “We hired a Chief Digital Officer who has implemented large-scale digital experiences at some of the world's top technology companies to lead our JRNY and e-commerce teams and accelerate our ongoing digital transformation,” CEO Jim Barr said in prepared Q3 remarks.

Nautilus appears poised to benefit from the broader trend of at-home, digital focused workouts where people follow along with various classes on their TVs, smartphones, connected monitors, and more. The market clearly has plenty of potential for growth.

Athleisure giant Lululemon LULU announced in June its plans to buy at-home fitness startup Mirror for $500 million. Plus, Apple AAPL just launched its new subscription-based connected workout platform dubbed, Fitness+.