5 Best Fitness and Gym Stocks To Buy Now

2. Lululemon Athletica Inc. (NASDAQ:LULU)

Number of Hedge Fund Holders: 65

Lululemon Athletica Inc. (NASDAQ:LULU) designs, distributes, and retails athletic apparel, footwear, and accessories under the lululemon brand for women and men. It is one of the best fitness stocks to monitor. On March 28, Lululemon Athletica Inc. (NASDAQ:LULU) reported a Q4 non-GAAP EPS of $4.40 and a revenue of $2.8 billion, outperforming Wall Street estimates by $0.14 and $100 million, respectively. 

On April 3, UBS analyst Jay Sole raised the firm’s price target on Lululemon Athletica Inc. (NASDAQ:LULU) to $399 from $335 and kept a Neutral rating on the shares. The analyst predicts that Lululemon will deliver 13% compound annual growth rates (CAGRs) in both earnings per share and sales over the next five years. As earnings rise, the analyst expects the stock to slowly increase. However, UBS believes that the potential for a significant recession restricts the possibility of substantial earnings per share growth.

According to Insider Monkey’s fourth quarter database, 65 hedge funds were long Lululemon Athletica Inc. (NASDAQ:LULU), compared to 57 funds in the last quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is the biggest stakeholder of the company, with 1 million shares worth $322.7 million. 

Brown Advisory released its Q2 2020 investor letter and mentioned Lululemon Athletica Inc. (NASDAQ:LULU). Here is what the firm said: 

“The recent market volatility afforded us the opportunity to swap out of our position in TJX Companies into Lululemon Athletica. While nothing at TJX was broken, our action was purely an upgrade from one good business model into an even better one, in our view. We believe Lululemon has an exceptional business model within the athleisure apparel space. The company has complete control over its product line distribution, which is rather unique for an apparel company. This gives the company a favorable margin structure, coupled with a fast-growing top line. As compared to TJX, Lululemon also benefits from a higher percentage of sales from e-commerce, which is becoming more important in the near and long term.”