Home fitness took off during the pandemic as people resorted to buying their own equipment instead of going to the gym. The trend led to significant gains for companies that operate within the industry.
The pandemic is long gone, and some home fitness stocks have crashed from their all-time highs. For example, Peloton (NASDAQ:PTON) used to be a hot pick in the industry. However, shares have declined by more than 90% from their all-time high. This year hasn’t been any better as the beleaguered fitness company is down by 33% year-to-date.
But not every home fitness stock is a flop like Peloton. In fact, there are plenty of winners. These are some of the top home fitness stocks to consider.
Garmin (NYSE:GRMN) produces many devices that help athletes track their performance. Runners use the company’s watches to see their current mile pace, average mile pace, heart rate and other data points.
The stock trades at a reasonable 22 P/E ratio and has a 2.45% dividend yield. Garmin delivered double-digit revenue and earnings growth in the third quarter. Fitness was a big winner that experienced 26% year-over-year growth. Fitness is the company’s second largest segment only behind the outdoor segment.
Fitness accounts for less than a third of Garmin’s total revenue. However, the segment’s piece of the pie is up compared to 2022 revenue numbers. As the fitness segment takes up a larger percentage of total revenue, Garmin investors can start to expect double-digit revenue and earnings growth to become the norm.
Garmin has high-profit margins that can support more dividend hikes and investments into new opportunities. The company still has a lot to offer for investors without the lofty valuation that is common among tech stocks.
Lululemon Athletica (LULU)
Lululemon Athletica (NASDAQ:LULU) is a sports leisure retailer that offers a range of athletic clothing. The company has a healthy profit margin that normally sits in the double digits. Lululemon continued that trend in the second quarter.
During that quarter, revenue jumped by 18% year-over-year to reach $2.2 billion. Net income also increased by 18% year-over-year to $341.6 million.
Lululemon also has a healthy balance sheet on top of its growth. The company’s $3.3 billion in total current assets comfortably exceed the corporation’s $1.4 billion in total current liabilities.
While the company aims to catch up to these giants, its stock has been a better buy for investors. Lululemon stock comfortably trounces most of its competition with a 31% year-to-date gain and a 250% gain over the past five years.
Every athlete needs to hydrate, and many of them are using sports drinks like the ones Celsius (NASDAQ:CELH) offers. Celsius has developed a strong following that has translated into triple-digit revenue and earnings growth.
In the third quarter, Celsius generated $385 million in revenue. It marks a 105% year-over-year increase. Net income also more than doubled year-over-year and reached $84 million. The company’s net profit margin exceeded 20%.
Celsius is in a hyper-growth phase that has seen the stock gain 3,800% over the past five years. Year-to-date gains currently sit at 50%. Despite the gains, the company is still relatively small and only has a $12 billion market cap. The company’s rapid growth suggests that the market cap can soar in the future.
The sports beverage company also has a pristine balance sheet that includes $1.2 billion in total current assets. That’s enough assets to comfortably cover $336 million in total current liabilities. Celsius is riding a wave of rising consumer demand and has the financials to ensure growth is sustainable.