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Hawk’s Nest

Nautilus (NLS) Call Buying Hot as At-Home Exercise Trends Continue

by | Sep 3, 2020

Nautilus (NLS) surge in activity on 9/1 and 9/2 with buyers of 4,000 October $10 calls for nearly $2M and over 2,000 September $10 calls bought for $855K, name that sees little options activity. NLS shares moved strong off the 50-MA yesterday after pulling back and testing July VPOC as well and above $15 poised for a move to $20+ with MACD and RSI both reset but in healthy trends, ready to run. The $405M company trades 14.6X earnings and 1.08X sales with strong FCF and limited debt. NLS makes fitness equipment for the home gym and obviously seeing a ton of demand from the pandemic as more people move away from gyms. NLS is coming off their best quarter ever in terms of Y/Y growth and highest Q2 sales in over 10 years. They see a lot of opportunity into the 2H as they build out supply chain capacity, invest in omnichannel partnerships, and accelerate work on their website and user portal. The company has been building out their tech with the Max Intelligence Platform that uses AI to help curate an individuals workout and give feedback. NLS admits that not all demand will remain steady into 2021 and faces some tougher comps but also expects 25% of gym-goers to never return to the public spaces and others may want fitness equipment at home as insurance. William Blair started coverage on 9/2 at Outperform, positioned for long-term profitable growth with demand for at-home fitness products surging in late March amid pandemic-related restrictions.