This Winner Keeps on Moving

Written by GSCR Staff   
Thursday, 06 December 2012 11:28

We highlighted Nautilus (NYSE – NLS - $3.93) when it was trading at $3.63 in early July as we felt that the Company’s restructuring was paying dividends as evidenced by recent results and the achievement of a new 52-week high.

Fast forward exactly 5 months later and the stock is up 10%, and has hit new highs in consecutive trading sessions. EPS estimates have been raised and as we noted earlier, NLS looks poised to bust through $4.00 very soon. We maintain that it could reach $5.00 in short order and $6.00 in a year’s time.  The valuation is currently less than 13x FY12 EPS and around 10x FY13 EPS estimates which is very cheap, especially in comparison to its expected EPS growth rate. Moreover, Street estimates suggest that NLS could generate more sales growth than many of its retail peers next year, which is a big driver behind the 33% annual EPS growth expectation.

Aaron Schweitzer

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