11 Best Fitness Stocks To Invest In

In this article, we discuss 11 best fitness stocks to invest in.

Online training continues to gain traction in the fitness world even as the restrictions of the coronavirus are being relaxed in almost all parts of the world. According to a survey by the American College of Sports Medicine, online training, a border term that includes live stream classes and workouts on demand, was for the first time ranked number one in the top ten fitness trends around the globe. These trends also included wearables, bodyweight training, outdoor activities, and high-intensity interval training. 

Per the survey, virtual training was also steadily becoming more popular. Virtual training programs are now increasingly offered in studios to allow members to train more flexibly. A recent report by fitness firm Les Mills reveals that 50% of consumers are taking greater care of their well-being since 2021, 82% exercise regularly or plan to, and 75% visit a gym. Fitness is becoming the biggest sport worldwide, per these numbers. However, after the virus crisis, the industry still has a long way to go before it can hit membership levels of 2019. 

According to market research firm IBISWorld, the gym, health, and fitness clubs market is valued at over $32 billion. It is set to grow at a compound annual growth rate of more than 4% in the next five years. Market growth is being supported by factors such as increasing equipment and facility spaces in fitness clubs. Some of the top fitness giants that investors can monitor in this context include NIKE, Inc. (NYSE:NKE), DexCom, Inc. (NASDAQ:DXCM), and Peloton Interactive, Inc. (NASDAQ:PTON). 

Our Methodology

The companies that operate in the fitness sector were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

Best Fitness Stocks To Invest In

11. Xponential Fitness, Inc. (NYSE:XPOF)

Number of Hedge Fund Holders: 11     

Xponential Fitness, Inc. (NYSE:XPOF) operates as a boutique fitness franchisor in the United States and internationally. It is one of the best fitness stocks to invest in. On October 5, the company announced that the Pure Barre, Rumble, AKT, and YogaSix classes were now streaming on the new fitness platform of Lululemon as part of a new deal between the two companies. 

On September 15, B Riley analyst Jeff Van Sinderen initiated coverage of Xponential Fitness, Inc. stock with a Buy rating and a $29 price target, noting that the firm had a massive opportunity as the boutique fitness trend was rapidly growing. 

At the end of the second quarter of 2022, 11 hedge funds in the database of Insider Monkey held stakes worth $57.9 million in Xponential Fitness, Inc., compared to 8 the preceding quarter worth $82 million.

Just like NIKE, Inc., DexCom, Inc., and Peloton Interactive, Inc., Xponential Fitness, Inc. is one of the best fitness stocks to buy now according to hedge funds. 

10. Nautilus, Inc. (NYSE:NLS)

Number of Hedge Fund Holders: 13   

Nautilus, Inc. (NYSE:NLS) is a fitness solutions firm. It is one of the top fitness stocks to invest in. In late September, the company announced that the board of directors of the firm had launched a comprehensive review of strategic alternatives. As part of the review, one of the options being considered was the potential sale of the company to identify opportunities to accelerate the digital transformation under the previously announced North Star plan and enhance shareholder value.

On October 5, Truist analyst Michael Swartz maintained a Buy rating on Nautilus, Inc. stock and lowered the price target to $4 from $5, noting there were concerns around the macro environment and consumer spending in relation to the firm. 

At the end of the second quarter of 2022, 13 hedge funds in the database of Insider Monkey held stakes worth $5.8 million in Nautilus, Inc., compared to 11 the preceding quarter worth $7.7 million.

In its Q4 2021 investor letter, Olstein Capital Management, an asset management firm, highlighted a few stocks and Nautilus, Inc. was one of them. Here is what the fund said:

“During the reporting period, the Fund initiated and eliminated its position in multi-brand fitness company, Nautilus Inc.. The Fund sold its position in Nautilus as supply chain constraints and inflationary pressures in a highly competitive environment changed our near- and medium-term cash flow projections for the company, undercutting our original investment thesis and valuation.”

9. WW International, Inc. (NASDAQ:WW)

Number of Hedge Fund Holders: 20     

WW International, Inc. (NASDAQ:WW) provides weight management products and services worldwide. It is one of the elite fitness stocks to invest in. On August 4, the company posted earnings for the second quarter of 2022, reporting earnings per share of $0.40, beating market estimates by $0.04. The revenue over the period was $269 million. The firm also said that at the end of the second quarter, subscribers stood at 4.3 million.

On August 8, DA Davidson analyst Linda Weiser maintained a Buy rating on WW International, Inc. stock and lowered the price target to $15 from $18.75, appreciating the second quarter earnings report of the firm. 

At the end of the second quarter of 2022, 20 hedge funds in the database of Insider Monkey held stakes worth $88.9 million in WW International, Inc., compared to 27 in the previous quarter worth $205.8 million.

In its Q3 2021 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and WW International, Inc. was one of them. Here is what the fund said:

“WW International, Inc. fell 48.75% during the quarter. The company reported 2Q results with revenues of $311M below consensus of $337M, with adjusted operating income of $65M below expectations of $82M. The miss came from the fact the company expected there to be a rebound in demand for weight loss as the economy started to open up but it turned out people were more focused on being social. The company guided for 2021 revenue of $1.3B near consensus of $1.28B with GAAP EPS (generally accepted accounting principles earnings per share) of $1.10-1.25 ($1.63-$1.78 excluding impact of early extinguishment of debt) versus consensus of $2.05. The company ended the quarter with the announcement that Mindy Grossman would be stepping down as President and CEO after the first quarter of 2022. The company is the process of searching for her replacement.”

8. Sprouts Farmers Market, Inc. (NASDAQ:SFM)

Number of Hedge Fund Holders: 24    

Sprouts Farmers Market, Inc. (NASDAQ:SFM) offers fresh, natural, and organic food products in the United States. It is one of the premier fitness stocks to invest in. Earlier this year, the company had authorized a new share repurchase program of $600 million. The program replaced the previous authorization with less than $100 million remaining.

At the end of the second quarter of 2022, 24 hedge funds in the database of Insider Monkey held stakes worth $287 million in Sprouts Farmers Market, Inc., compared to 24 in the previous quarter worth $311 million.

In its Q2 2022 investor letter, Arch Capital, an asset management firm, highlighted a few stocks and Sprouts Farmers Market, Inc. was one of them. Here is what the fund said:

“We entered 2022 with Sprouts Farmers Market, Inc. as the fund’s largest position. This was due to our initial position sizing, the stock’s great performance, and the poor performance of the rest of our portfolio holdings. In early March, SFM popped 15% and reached a market cap close to $4 billion. This put a double whammy on our expected forward returns for the stock. First, and most obvious, a higher market cap means we are yielding less in cash flow each year. Our bet on SFM revolved around durable (but low growth) cash flow generation that was yielding more than 10% when we purchased shares. At a market cap significantly higher, forward returns would be lower than our 15% hurdle rate. Second, a big reason we liked SFM was management’s strategy to pour all free cash flow into share repurchases at a depressed earnings multiple. This attractiveness incrementally goes away at higher and higher share prices. Combine this with other opportunities presenting themselves with the broad market sell-off this year, and we decided to fully exit our SFM position.”

7. The Hain Celestial Group, Inc. (NASDAQ:HAIN)

Number of Hedge Fund Holders: 25  

The Hain Celestial Group, Inc. (NASDAQ:HAIN) manufactures, markets, and sells organic and natural products internationally. It is one of the most prominent fitness stocks to invest in. The firm recently posted preliminary results for the fourth fiscal quarter. The food and fitness company reported sales of approximately $447 million, net income of approximately $3 million, and adjusted EBITDA of approximately $35 million for the quarter.

On September 19, Piper Sandler analyst Michael Lavery maintained an Overweight rating on The Hain Celestial Group, Inc. stock and lowered the price target $24 from $27, noting that the company’s fiscal 2023 outlook remains on track. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in The Hain Celestial Group, Inc., with 2.1 million shares worth more than $50.7 million. 

In its Q2 2022 investor letter, Madison Funds, an asset management firm, highlighted a few stocks and The Hain Celestial Group, Inc. was one of them. Here is what the fund said:

“Ordinarily, when recessionary fears intensify, defensive stocks like food and other staples outperform. However, our second-worst performing sector was arguably, our most defensive, consumer staples. As we mentioned earlier in our commentary, one of the biggest detractors from our performance was The Hain Celestial Group, Inc.. So, what happened? Hain was one of our best performing stocks for the last two years. In fact, in Q4 of 2021 the stock reached a 5-year high of approximately $45. We have consistently believed, and continue to believe, that the private market value (PMV) for HAIN is approximately $70. As of this writing the stock is currently trading close to $24. For the second quarter, the stock declined just over 31%. So why did HAIN not behave defensively? The only thing ‘different this time’ is inflation. Inflation has pressured HAIN’s transportation costs as well as input costs like oil and ingredients required to manufacture foodstuffs. Although the company has largely passed on most of these cost increases, the market fears that if inflation persists, HAIN’s ability to continue to pass these prices will not only wane but may also hurt demand as consumers trade down to lower-priced alternatives. As with RVLV however, we believe these fears are overdone and the market is underestimating the resilience of HAIN’s higher income target demographic. Furthermore, as of this writing, several of the company’s input baskets have meaningfully retreated. Although the near term may still be choppy, commodity cost relief will only strengthen the long-term profitability of HAIN if the price increases prove to have even modest stickiness.”

6. Foot Locker, Inc. (NYSE:FL)

Number of Hedge Fund Holders: 28  

Foot Locker, Inc. (NYSE:FL) operates as an athletic footwear and apparel retailer. It is one of the best fitness stocks to invest in. On August 23, Deutsche Bank analyst Gabriella Carbone maintained a Hold rating on Foot Locker, Inc. stock and raised the price target to $34 from $31, citing that the company saw sales trends pick up meaningfully in the back half of July. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Balyasny Asset Management is a leading shareholder in Foot Locker, Inc., with 2.2 million shares worth more than $55.97 million. 

In addition to NIKE, Inc., DexCom, Inc., and Peloton Interactive, Inc., Foot Locker, Inc. is one of the best fitness stocks to buy now according to hedge funds. 

In its Q1 2022 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Foot Locker, Inc. was one of them. Here is what the fund said:

“Finally, Foot Locker came under significant pressure during the quarter, with the stock down more than 50% from its highs and valuation not far from early 2020 lows. Nike continues to place a greater focus on their Direct-to-Consumer business, which will decrease their contribution to Foot Locker’s total sales, retreating to historical averages of 50% by 2023. While a near-term headwind to sales, management plans to offset the lost business by expanding distribution to other leading brands, rolling out larger neighborhood free-standing stores, and expanding two new growth banners (WSS & Atmos). WSS stores will provide an off-mall presence and focus on the rapidly growing and underserved Hispanic market. Atmos will provide Foot Locker with the ability to expand into Japan and Asia sneaker market with their digitally led business model. These new growth concepts have a combined potential to add more than $1B in sales by 2024. The company’s balance sheet remains very strong with $800M in cash and management is increasing returns to shareholders through raising the dividend by 40% and announcing a $1.2B share buyback (more than 40% of the float at current share prices). With the next 12 to 18 months as a transition period for the company, the share price weakness provides attractive reward/risk investment potential, near 3x Enterprise Value/Earnings Before Income, Taxes, Depreciation, and Amortization (EV/EBITDA) and close to a 30% normalized free cash flow yield.”

5. DICK’S Sporting Goods, Inc. (NYSE:DKS)

Number of Hedge Fund Holders: 28 

DICK’S Sporting Goods, Inc. (NYSE:DKS) operates as a sporting goods retailer primarily in the eastern United States. It is one of the best fitness stocks to invest in. The company recently announced a new partnership with fitness firm Peloton Interactive. Under the arrangement, the firm will sell the hardware products of the latter and select accessories via branded fitness shops inside more than 100 DKS US retail locations. 

On August 24, UBS analyst Michael Lasser maintained a Neutral rating on DICK’S Sporting Goods, Inc. stock and raised the price target to $112 from $102, appreciating the second quarter earnings results of the firm. 

Among the hedge funds being tracked by Insider Monkey, Washington-based firm Lone Pine Capital is a leading shareholder in DICK’S Sporting Goods, Inc., with 5 million shares worth more than $338 million. 

In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and DICK’S Sporting Goods, Inc. was one of them. Here is what the fund said:

“DICK’S Sporting Goods, Inc. was the first stock Michael recommended to us shortly after he joined Baron Capital in 2003. Dick’s share price has since increased about nine-fold. Unfortunately, we sold our investment in Dick’s about six years ago and, although it was a successful investment, we did not realize the full benefit of Michael’s recommendation. We sold too soon because I was concerned that competition from internet retailers would have a permanent negative impact on Dick’s stores’ profitability. I was wrong. Dick’s stock price so far has about doubled after we sold…and its prospects have brightened!

We sold even though we considered Ed Stack, Dick’s Chairman and CEO, a terrific retailer, a great entrepreneur and a special person. Ed had built Dick’s from three bait and tackle stores his dad started into a uniquely positioned, nationwide chain of 730 sporting goods stores. In fact, Dick’s is now the largest nationwide sporting goods chain. Ed had purchased the three bait and tackle stores, the foundation of Dick’s business, from his dad. Ed’s mother loaned him the money to buy his dad’s stores! I’m not exactly sure what that signifies. But it may have something to do with Carl Icahn’s proclamation that “everything I have is for sale except my children…and maybe my wife (…read more)

4. Skechers U.S.A., Inc. (NYSE:SKX)

Number of Hedge Fund Holders: 31     

Skechers U.S.A., Inc. (NYSE:SKX) designs, develops, markets, and distributes athletic footwear for men, women, and children, as well as performance footwear for men and women worldwide. It is one of the top fitness stocks to invest in. Skechers USA shares have popped up recently after an SEC Filing showed that Michael Greenberg, the president of the firm, had bought 103,000 shares of the company, taking his ownership to 447,000 shares. 

On July 27, Wedbush analyst Tom Nikic maintained an Outperform rating on Skechers U.S.A., Inc. stock and lowered the price target to $42 from $48, noting that the company reported slightly better-than-expected Q2 results. 

At the end of the second quarter of 2022, 31 hedge funds in the database of Insider Monkey held stakes worth $830 million in Skechers U.S.A., Inc., compared to 28 the preceding quarter worth $893.5 million.

In its Q1 2022 investor letter, Fiduciary Management, an asset management firm, highlighted a few stocks and Skechers U.S.A., Inc. was one of them. Here is what the fund said:

“Skechers U.S.A., Inc. is the third largest footwear brand in the world. The company designs, manufactures, and distributes footwear for men, women, and children in U.S. and international markets. Its products cover a wide range of footwear categories including casuals, dress casuals, sandals, boots, work boots, performance footwear, and kids footwear. The company operates in three business segments: Domestic Wholesale (23% of sales), International Wholesale (48% of sales), and Direct-to-Consumer (29% of sales). In total, international sales account for approximately 60% of revenue…(read more)

3. Peloton Interactive, Inc. (NASDAQ:PTON)

Number of Hedge Fund Holders: 39      

Peloton Interactive, Inc. operates interactive fitness platforms in North America and internationally. It is one of the elite fitness stocks to invest in. On September 21, Citi analyst Ronald Josey reiterated a Buy rating on Peloton Interactive, Inc. stock with a $23 price target, highlighting that the company announced the launch of a new home-rower machine and rolled out a series of software updates in the past few weeks. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Peloton Interactive, Inc., with 20 billion shares worth more than $12.7 billion. 

In its Q2 2022 investor letter, Rowan Street Capital, an asset management firm, highlighted a few stocks and Peloton Interactive, Inc. was one of them. Here is what the fund said:

“Peloton Interactive, Inc. has been a costly mistake for the fund thus far. We started a small position back in September of 2020 and added to it as the stock declined and the price got “cheaper and cheaper”.

We would like to walk you through the rationale why we bought the stock in the first place and why we added to the position. We will give you just a short summary in the main body of the letter, and for those who are interested in a more detailed version, we have included a write-up on Peloton in the Appendix at the end of this letter.

The trial is still out whether we made a mistake on the company, but we definitely made the mistake on the weighting of our position and the price that we originally paid…(read more)

2. DexCom, Inc. (NASDAQ:DXCM)

Number of Hedge Fund Holders: 56  

DexCom, Inc. is a medical device company that focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems. It is one of the elite fitness stocks to invest in. The firm recently said that the Dexcom G7 continuous Glucose Monitoring system was available for people with diabetes aged two years and older in the UK, Ireland, Germany, Australia, and Hong Kong. The company is also working to launch the G7 in New Zealand and South Africa. 

On July 29, Oppenheimer analyst Steven Lichtman maintained an Outperform rating on DexCom, Inc. stock and lowered the price target to $105 from $131,  highlighting that the company post-earnings selloff was a buying opportunity for the investors. 

At the end of the second quarter of 2022, 56 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in DexCom, Inc., compared to 58 in the preceding quarter worth $1.5 billion. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and DexCom, Inc. was one of them. Here is what the fund said:

“DexCom, Inc. is the leading provider of continuous glucose monitoring systems for patients with diabetes. The stock fell along with other premium valuation growth stocks, primarily on multiple contraction. Concern about price competition from Abbott Labs’ Libre product also played a role. Results for the first quarter were solid. Sales increased 22% organically, margins expanded 350 basis points, and the company maintained guidance for continued strong results.

An important new and revolutionary product, the G7, was approved and launched in Europe, and the company expects it to be approved in the U.S. soon. The product is 60% smaller, fully disposable, and designed for extended wear. We remain excited that CGM will become the standard of care for Type 1 diabetics and will be used extensively for Type 2 diabetics as well, which we think will be a major driver of continued sales and profit growth well into the future.”

1. NIKE, Inc. (NYSE:NKE)

Number of Hedge Fund Holders: 72  

NIKE, Inc. designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide. It is one of the most prominent fitness stocks to invest in. The company has been making efforts to clear excess inventory. During the first fiscal quarter, the firm saw its inventory soar 44% to $9.7 billion as it took holiday supplies early and bounced back from some of the pandemic-related supply chain issues of the last two years. 

On September 30, Jefferies analyst Randal Konik maintained a Buy rating on NIKE, Inc. stock and lowered the price target to $115 from $130, noting that supply chain, foreign exchange, and promotional-related headwinds weighed on fiscal Q1 performance. 

At the end of the second quarter of 2022, 72 hedge funds in the database of Insider Monkey held stakes worth $3.3 billion in NIKE, Inc., compared to 67 in the preceding quarter worth $3.98 billion. 

In its Q2 2022 investor letter, Madison Funds Management, an asset management firm, highlighted a few stocks and NIKE, Inc. was one of them. Here is what the fund said:

“NIKE, Inc. (NYSE:NKE) is the largest seller of athletic footwear and apparel in the world. Started from humble beginnings as Phil Knight’s “crazy idea” in a Stanford entrepreneurship class, Nike marked its 50th anniversary this year. By remaining true to its innovative culture, the brand is as strong as ever and continues to generate attractive growth, soon to surpass $50 billion in annual revenue. In addition to the continuous investments in brand innovation and marketing, over the last few years Nike has invested heavily to lay the foundation for multi-channel commerce. Today, Nike generates approximately 40% of its revenues through its online channel and branded storefronts. Empowered by CEO John Donahoe’s “Nike Consumer Direct Offense,” Nike’s ongoing investments are expected to further drive their overall revenue mix towards the direct-to-consumer channel which we estimate will result in substantial margin improvement over the next three to five years.

While Nike’s business in China, which accounts for approximately 20% of revenue, is experiencing challenges today, our due diligence suggests that consumer preference for the Nike brand outside the U.S. remains incredibly strong. Overall, we expect Nike’s broader ecosystem, often referred to as the Nike Marketplace, to continue to leverage the company’s innovation and premier brand to build direct consumer relationships which deepen Nike’s competitive moat and enhance its financial profile. Turbulence in the Chinese market and concerns over consumer spending in the US and Europe enabled us to initiate a position in Nike at an attractive discount to our appraisal of the company’s long-term value.”

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This article is originally published at Insider Monkey.