Nautilus (NLS) posted a disappointing Q2 last week that saw a continuation of the weak growth trend that has weighed on the stock over the past year and a half. Management did lift revenue guidance for the year, but it’s clear that growth has plateaued and there’s probably not much upside left. Conversely, cyclicality is a huge risk and an economic downturn would cause a significant decline in earnings. Shares still trade above mid-cycle average valuations, but insiders have been selling. Avoid Nautilus.
Q2 Review and Valuation Discussion
NLS has a lot of