It’s not just about completing the hardest workouts anymore. It’s about staying in shape— and the key to keeping your body healthy is physical fitness.
More Americans have embrace going to the gym as a way of life. However, with the COVID-19 restrictions imposed last year, gyms were hard-hit by the social distancing rule.
2019-2020 saw a large decrease in gym memberships, one of the major sources of income for gyms across the U.S.
But to keep fit, people turned to exercise at home, which has been a great business for some fitness-related companies and bad for most pure-play gym stocks.
For example, during the first half of 2020, the Apple Watch witnessed a 20% increase in overall shipments despite the ongoing pandemic, home -fitness equipment business grew by 170%, and fitness app downloads grew by 46% worldwide.
On the other side, gyms like Town Sports International were filing for bankruptcy.
For this reason, fitness stocks have been booming, at the expense of gym stocks. But there is hope.
We might see gym stocks do better as the world continues to regulate the global pandemic.
Yet, not all gyms are poised to benefit from this opportunity in the long term.
For this reason, we looked into Wall Street and found you the best gym stocks to buy in July.
Here are the best seven fitness stocks to power your portfolio.
Best Gym Stocks to Buy
F45 Training, which has 800 gyms in the U.S. alone and over 1,750 worldwide, is a global fitness community that believes you are 45 minutes away from your fitness goals.
It was started by Rob Deutsch in 2012 as a way to combine his passion for personal training and 45-minute workout high-intensity training.
The goal, he said, was to create a fitness studio that focused on the 45-minute high-intensity interval class model and to bring that studio into gyms around the globe.
But don’t get it wrong. The F45 is not that glamorous. You won’t find Peloton Treadmills, bulky boxing bags, or heavy equipment here.
The workouts are hard but week after week thousands of subscribers cough up the expensive membership fee and eagerly turn up for classes.
However, like most gyms during the pandemic, F45 Training was hit hard by the closure of many of its stations across the world.
The free cash flow of the past year was negative ($17.5 million, if you exclude the debt repayment)
Now the company is seeking U.S. public investment to pay its debt, bonuses and for general corporate purposes, months after canceling a merger with a SPAC.
F45 is eyeing a valuation of more than $1.5 billion in IPO, selling about 20.3 million shares.
With an estimated stock price of between $15 and $17 apiece, these pure-play gym shares are worth keeping an eye out for.Wondering where to buy the stocks listed in this article? Check out Webull! Webull is an excellent trading app for beginnings and experienced investors alike. They have zero fee trading, and you'll even get a free stock (valued up to $1600) just for signing up!
Lifetime Fitness Inc.
Lifetime Fitness has revolutionized the landscape of fitness centers by creating a “total-member” concept that goes far beyond simply providing a quality workout.
This publicly listed company in Eden Prairie, Minnesota, operates over 150 athletic, fitness, and family recreation centers in 41 major markets across the U. S and Canada.
Many of these Lifetime Fitness Centers have been around since 2000, and most still deliver growth in membership levels.
The company also owns luxury athletic resorts and is expanding the brand through renting high-end leased residences.
Unlike other gyms that provide only basic services, Lifetime Fitness provides the extras, from fitness training to sports and more.
Since the company has 1.7 million lifetime members, 2 billion dollars in property, and 19 million group fitness members, we can conclude that the company is doing great.
Lifetime Fitness last registered on NASDAQ in 2015 before being acquired by Leonard Green & Partners and TPG for $72.10 per share, in a deal that saw the company go private.
If the company went public, like many privately listed gyms, it might be one of the best stocks to add to your portfolio.
Equinox operates a chain of high-end and full-service fitness clubs under the Precision Run, Blink, Equinox, SoulCycle, and Pure Yoga brands.
Most of these clubs provide services that include strength and cardio training, group fitness classes, personal training, spa services, and products.
Equinox Holdings is meeting with as many as 12 potential acquirers, in discussions to go public, but has not chosen a firm, according to Bloomberg.
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The identity of those potential bidders is unclear, although there are multiple firms interested in acquiring most of the company, according to the report.
Whether or not they will make a formal offer is anyone’s guess… but don’t be surprised if you see multiple pitches for the company in the coming months.
Equinox is still looking for other alternatives but as things stand, going public might be the only way to save the company after a difficult year in 2020.
The company is said to have lost over $350 million that year because of the temporary closure of gyms across the United States.
If a deal happens, Equinox could fetch a valuation of over $9 billion, as more investors look to reopen plays that are likely to benefit from reopening the economy.
As a publicly-traded stock, Equinox Holding looks to offer more value to investors in the coming years.
Publicly Traded Gym Stocks
Planet Fitness (NYSE: PLNT)
Number one on our list is one of the few pure-play gym stocks on the U. S Market — Planet Fitness Inc.
Planet Fitness, together with its franchises and subsidiaries, currently owns and operates over 2,000 fitness clubs that provide personal training programs, massage facilities, branded merch, focus workouts, and other services.
Established in 1992, Planet Fitness owes its wide customer reach to its “judgement-free zone” policy where even beginners feel at home.
A low-cost approach helped to keep this company afloat since March 2020, when the shares dropped from $88 to a low of $24 while competitors like Gold’s Gym were declaring bankruptcy.
Since then, 17% of gyms in the U.S went out of work but none of the Planet Fitness franchises were shut down.
Thanks to the franchise part of the business, Planet Fitness has good margins since it is capital-light and has manageable debt.
But as COVID restrictions ease around the country, more people are going back to the gym to shake the monotony of working out at home.
And with gym subscriptions starting for as low as $10 per month, Planet Fitness is likely to benefit at the cost of competitors.
Planet Fitness stock has shown it can persevere the worst economic conditions while still growing.
From a technical perspective, the stock price has fallen since trading at $78 per share in June.
However, if you do not see the current $74 price tag as a high valuation, consider investing during this dip.
Before Peloton was a famous brand, there was Nautilus.
This group designs, develops, sources, markets, and distributes an array of gym products in the United States and abroad.
It serves consumers and health clubs through its own direct sales force, independent partners and was one of the greatest beneficiaries of the COVID-19 protocols.
Nautilus was able to get back up quickly because of the growth in the work-from-home movement.
With an increase in consumer need for home workout equipment and stationary bikes, the company increased net sales by 120% to $206 million, the best quarterly sales in Nautilus’ history.
At the time of writing, the stock in Nautilus is up over 900% from when it was at a little over one dollar in 2018.
Nautilus, which owns the Nordic Track and Bowflex Brand (which are brands for fitness equipment, by the way) is getting into connected fitness and subscriptions with its newer models.
If successful, Nautilus stock could take off.
Peloton Interactive Stock (NASDAQ: PTON)
Peloton Interactive, Inc. is a provider of fitness products and services.
The company has generated a lot of attention recently for its exercise bike that comes with an interactive screen that allows users to take part in online classes at home, at the gym, or anywhere with a Peloton Bike.
The Peloton bike is premium price, and the monthly membership fees are pretty high, but that hasn’t stopped the 4.4 million users from buying them despite the current hefty price tag of $2,945 and a monthly subscription charge of $39 payable by debit and credit cards.
The company did so well that in the most recent quarter, the company’s statements show that subscriptions for Connected Fitness grew to about 1.67 million new subscriptions.
Paid digital subscriptions multiplied by 472% — around 625,000 consumers.
Peloton stock currently trades at levels around $126 per share, but the future value is projected to be about 8 times the current price.
If you’re in a position to buy these shares, now is the right time.
Gym Penny Stocks
Town Sports International (CLUB Q)
The penny stock section for pure-play fitness stocks is slim picking.
If you don’t know Town Sports International, it’s because they were going out of work earlier in the year.
They are perhaps one of the most affected companies in the fitness industry by the pandemic.
Town Sports International filed for bankruptcy a year ago on September 14, 2020, which will allow the company to remain open and rethink its strategy.
Recent news shows that CLUB reported liabilities of around $500 million but has assets worth $1 billion. And the company still owns hundreds of gyms across the country.
Investors need to pay close attention to when and if the association makes a come back later in the year.
With prices hitting an all-time low of $0.17, this could mean huge earnings for investors in future or it might be just a stock that is heading to the gutters.Looking for more stock picks? Get a new trade every week for free with Trade Ideas. Trade Ideas sends you a new pick every single week along with the reasoning on why it could be ready to break out. Sign up for free right here.
Should You Buy Gym Stocks?
Investing in the stock market can be a great way to generate revenue. It’s also easy — and sometimes fun! — if you’re willing to put in the work.
Gym stocks are a popular way to invest and usually offer decent returns, whether you buy the whole company or manage a particular class of stocks.
Gym stocks, or the stocks of any company that sells training and fitness equipment, have experienced tremendous growth over recent years.
As a result, several potential investing ideas might make you money with these types of stocks.
However, you should know that this isn’t an investment without risk. If the stock market crashes, your money could be wiped out.
The gym industry is still going through a rough patch, but that never worried any serious investor.
So, should you buy gym stock? That is entirely up to you. Weigh the pros and cons and you’ll get your answer.
Gym Stocks: Final Thoughts
Just like any other business, Gym Stocks are subject to change and the occasional bad trade.
That said, there are some great reasons you should buy gym-related stock.
If you’re looking for long-term property investment (that doesn’t suffer from repeatedly losing value), these are a good bet.
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