Bull of the Day: Nautilus Inc. (NLS)

One of the most common New Year’s resolutions is to lose weight, and or to get fit for the New Year.  This pledge brings in tons of new clients to gyms, nutrition centers, and online exercise retail outlets in the beginning of each new year.  These people purchase gyms memberships, and purchase exercise equipment at a very high rate during this time of the year.  One of the leading lifestyle and exercise companies is Nautilus Inc. (NLS - Snapshot Report), and they are the Zacks Bull of the Day.  
This Zacks Ranked #1 (Strong Buy) company helps people achieve a fit and healthy lifestyle through proper exercise, rest and nutrition. With a brand portfolio that includes Nautilus, Bowflex, SchwinnFitness, StairMaster and Trimline, Nautilus manufactures and markets a complete line of innovative health and fitness products through direct, commercial and retail channels.

The company recently posted preliminary unaudited results for the fourth quarter, and 2015 results.  The report showed that quarterly net sales improved +15% from the year ago quarter, and full year net sales rose +22% when compared to FY 14.  Management expects to see FY 15 earnings per share from continuing operations are expected to be in a range of $0.85-$0.87, which would be a 32-36% year over year gain.  

Also, the company finalized their $115 million dollar deal to purchase Octane Fitness LLC, a leading fitness products company.  According to Bruce Cazenave, CEO, “We are pleased to report another quarter and year of solid top line growth. Our fourth quarter results reflect increased sales for both our Direct and Retail segments, including continued strong consumer demand for the Max Trainer product line as well as strong contributions from new product categories for our retail business. The recently announced addition of Octane Fitness to our portfolio in 2016 will help to further strengthen our position in the fitness market and provide significant profitable revenue acceleration opportunities through product and channel diversification. I am extremely proud of our dedicated employees for their outstanding efforts in delivering these results and for their hard work in continuing to build strong growth platforms for the future.”

As you can see from the graph below, Nautilus has seen steady growth over the past three years, with estimates rising year over year.



Increasing Estimates

Due to the strong preliminary results for Q4 and FY 15, estimates over the past 30 days have risen for Q1 16, and FY 16.  Q1 16 improved from $0.39 to $0.47, and FY 16 jumped from $0.95 to $1.12.

The company also has a strong history of beating the Zacks Earnings Estimate Consensus, by posting a four quarter average positive earnings surprise of +16.7%.  Specifically, Nautilus has met or beaten the Zacks Consensus Earnings Estimate for the past six consecutive quarters.  

Bottom Line

As people begin their new exercise regiments, and fulfill their resolutions, Nautilus is uniquely positioned to improve client’s health and fitness needs.  Further, with strategic acquisitions and top of the line exercise equipment the company has posted sizable earnings and revenue growth over the past year, and is expected to continue to grow into the first half of 2016.

by Brian Hamilton

source: http://www.zacks.com/commentary/68835/bull-of-the-day-nautilus-inc-nls#sthash.WcVJgbyt.dpuf