Outdoor recreation is resuming as people turn increasingly to nature for mental and physical wellness, social interactions, and adventure. Remarkably, studies show that participation in outdoor recreation has increased during the pandemic. Nearly half of adults in the United States now participate in outdoor recreation on at least a monthly basis, and approximately 20% might have first engaged in outdoor recreation during the pandemic. According to the Bureau of Economic Analysis (BEA), outdoor recreation generated $688 billion in gross output during a year of shutdowns and closures in 2020.

Given the widespread roll-out of COVID-19 vaccines and the flexibility of hybrid working arrangements, people are heading outdoors to enjoy recreational activities, which should lead to increased demand for goods and services in the recreation space this spring season. The growing interest and evolving fitness trends around the globe are among the significant factors driving this industry’s growth.

Given this backdrop, we think outdoor recreation stocks Academy Sports and Outdoors, Inc. (ASO), Vista Outdoor Inc. (VSTO), GoPro, Inc. (GPRO), MarineMax, Inc. (HZO), and Johnson Outdoors Inc. (JOUT) could be worth betting on.

Academy Sports and Outdoors, Inc. (ASO)

ASO, through its subsidiaries, operates as a retailer of sporting goods and outdoor recreational products. It sells its products under the brand names, Academy Sports + Outdoors, Magellan Outdoors, BCG, O’rageous, and Outdoor Gourmet. ASO is based in Katy, Tex.

Last month, ASO announced that it would launch a free activewear girls’ apparel line and fresh styles for spring. The new patterns and colors will be updated throughout the spring season. Customers can shop for Freely’s latest Women’s, Women’s Plus, and Girls’ collections in all its 259 stores, and thus should add significantly to the company’s revenue stream.

On Jan. 25, 2022, ASO announced that it would open at least eight new stores this year in its existing markets, while also expanding its footprint into Virginia and West Virginia. With these openings, ASO will have 267 stores in 18 states, further strengthening its market reach.

ASO’s net sales increased 18.1% year-over-year to $1.59 billion in its fiscal third quarter, ended Oct. 30, 2021. Its operating income grew 165% from its  year-ago value to $216.11 million, while its net income improved 170.7% year-over-year to $161.31 million. Its EPS increased 132.4% from its year-ago value to $1.72. 

The $1.44 consensus EPS estimate for its fiscal fourth quarter, ended Jan. 31,2022 represents a 31.8% improvement year-over-year. The $1.78 billion consensus revenue estimate for the same quarter represents an 11.4% increase from the same period last year. Also, it has an impressive earnings surprise history; it topped the Street’s EPS estimates in each of the trailing four quarters.

ASO has gained 53.5% in price over the past year and 18.2% over the past month to close the last trading session at $37.55.

ASO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B , which translating to Buy in our POWR ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

ASO also has a B grade in Growth, Value, Sentiment, and Quality. It is ranked #1 of 36 stocks in the Athletics & Recreation industry.

Beyond what is stated above, we have also rated ASO for Momentum and Stability. Get all the ASO ratings here.

Vista Outdoor Inc. (VSTO)

VSTO in Anoka. Minn., designs, manufactures, and markets consumer products in the outdoor sports and recreation markets in the United States and internationally. The company operates through two segments: Shooting Sports; and Outdoor Products.

VSTO and Stockperks, a retail investor engagement company, recently announced the launch of the Vista Outdoor Shareholder Rewards Program on the Stockperks app. With this, retail shareholders who use the Stockperks app can redeem merchandise discounts on some of Vista Outdoor’s leading brands. This is expected to enhance the company’s relationship with its retail investors.

For its fiscal third quarter, ended Dec. 26, 2021, VSTO’s net sales increased 38.3% year-over-year to $794.65 million, driven by strong double-digit growth across both operating segments. Its gross profit grew 72.4% from its year-ago value to $281.47 million. Its net income stood at $118.14 million, reflecting a 49.8% increase year-over-year, while its EPS was $2.00, up 52.7% from the prior-year quarter.

VSTO’s revenue for the current quarter is expected to come in at $759.41 million, indicating 27.3% year-over-year growth. The company’s EPS is expected to increase 77.2% year-over-year to $1.81 for the same quarter. VSTO also beat the consensus EPS estimates in each of the trailing four quarters.

Over the past year, the stock has gained 16.8% in price to close yesterday’s trading session at $36.78. It has gained 9.7% over the past month.

It is no surprise that VSTO has an overall B rating, which equates to Buy in our POWR Ratings system.

VSTO has an A grade in Value and a B in Growth and Quality. It is ranked #2 in the Athletics & Recreation industry.

In addition to the POWR Rating grades I have just highlighted, one can see VSTO’s ratings for Stability, Sentiment, and Momentum here.

GoPro, Inc. (GPRO)

GPRO develops and sells cameras, mountable and wearable accessories, and subscription services and software worldwide. The San Mateo, Calif., company’s product offerings include its flagship waterproof camera range and other accessories for outdoor recreational activities.

GPRO’s revenue increased 9.3% year-over-year to $391.15 million in its fiscal fourth quarter, ended Dec. 31, 2021. Its non-GAAP operating income improved 7.9% year-over-year to $69.23 million over the period, while its non-GAAP net income increased 8.3% from its year-ago value to $66.15 million. The company’s non-GAAP EPS increased 5.1% to $0.41 in the same period.

Analysts expect GPRO’s revenue for its fiscal quarter ending March 31, 2022, to be $217 million, indicating a 6.5% increase year-over-year. The company’s EPS is expected to grow 86% year-over-year to $0.06 in the same period. It also surpassed the consensus EPS estimates in each of the trailing four quarters.

GPRO’s stock has slumped marginally intraday to close the last trading session at $8.26.

GPRO’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to Buy in our proprietary ratings system.

GPRO is also rated B in Quality and Value. Within the Technology – Hardware industry, it is ranked #15 of 46 stocks.

Click here to see additional POWR Ratings for Growth, Sentiment, Momentum, and Stability for GPRO.

MarineMax, Inc. (HZO)

HZO in Clearwater, Fla., is a recreational boat and yacht retailer and superyacht services company in the United States that operates through two segments–Retail Operations; and Product Manufacturing.

This month, HZO announced an extension of its previously announced stock repurchase plan, authorizing the company to repurchase up to 10 million shares of its common stock during the period ending March 31, 2024. This should potentially improve existing shareholders’ returns. The previous plan had authorized the repurchase of up to 10 million shares through March 31, 2022, of which approximately 700,000 shares had been repurchased as of Feb. 24, 2022.

HZO’s revenue increased 14.9% from the prior-year quarter to a record $472.69 million in its fiscal first quarter, ended Dec.31, 2021. The revenue growth can be partly attributed to strong same-store sales growth of 9%, which was driven by increased unit sales. Its income from operations for the quarter came in at $47.20 million, reflecting a 47.6% increase year-over-year, while its net income stood at $35.94 million, up 52.3% year-over-year. Its net income per share increased 52.9% from its year-ago value to $1.59.

The Street expects HZO’s EPS for its fiscal quarter ending March 31, 2022, to improve 5.5% year-over-year to $1.78. The $550.12 million consensus revenue estimate for the same period represents a 5.2% increase year-over-year. It topped the Street’s EPS estimates in each of the trailing four quarters.

Over the past month, the stock has gained 1.1% in price to close yesterday’s trading session at $44.01.

HZO’s POWR Ratings reflect this promising outlook. The company has an overall Brating, which translates to Buy in our proprietary rating system.

HZO is rated A in Value and B in Quality. In the Athletics & Recreation industry, it is ranked #3.

To see additional POWR Ratings for Momentum, Growth, Sentiment, and Stability for HZO, click here.

Johnson Outdoors Inc. (JOUT)

JOUT designs, manufactures, and markets seasonal and outdoor recreational products for fishing worldwide. It operates through four segments: Fishing; Camping; Watercraft Recreation; and Diving. JOUT is based in Racine, Wis.

Last month, JOUT declared a quarterly cash dividend of $0.30 per Class A share and $0.2727 per Class B share, payable on April 28, 2022, to shareholders of record at the close of business on April 14, 2022.

JOUT’s net sales for the first quarter, ended Dec. 31, 2021, increased 20% from the pre-pandemic December 2019 quarter’s net sales. Furthermore, its camping revenue increased 16% year-over-year in the same period driven by continuing strong demand, while both watercraft recreation and diving segments’ revenue increased 17% from the prior-year quarter.  

The company’s revenue is expected to increase marginally year-over-year to $753.72 million in its fiscal year ending Sept. 30, 2022. Also, its revenue is expected to increase 5.6% in the following year.

JOUT’s shares have gained 1.2% in price over the past month to close the last trading session at $80.62.

The stock has an overall B rating, which equates to Buy in our POWR Ratings system. It has an A grade in Sentiment and a B in Value. The stock is ranked #7 in the Athletics & Recreation industry.

To get JOUT’s ratings for Momentum, Stability, Quality, and Growth, click here.

ASO shares were trading at $37.13 per share on Thursday afternoon, down $0.42 (-1.12%). Year-to-date, ASO has declined -15.24%, versus a -5.22% rise in the benchmark S&P 500 index during the same period.

About the Author: Subhasree Kar

Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...

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