- Nautilus shares moved sharply higher during Wednesday's session after a bullish report from Citron Research.
- The analyst believes that the stock has numerous catalysts, and credit card data has shown higher-than-projected revenue growth.
- Technical indicators suggest that the stock has room to run before it reaches overbought levels.
Citron Research, which is best known as a short seller, cited credit card data showing year-over-year revenue growth at Nautilus tracking at close to 400% compared to a 73% consensus. Since it does not own publishing rights to the data, the analyst did not publish the sources, but it did suggest that the data was widely available to institutional investors.
Given Nautilus' newly revamped connected fitness product line, the upcoming JRNY platform launch, availability at a broad range of retailers, accelerating subscription revenue, and explosive growth, Citron Research believes that it's only a matter of time before the stock "re-rates to over $30 if it isn't acquired before then."
From a technical standpoint, Nautilus stock has steadily risen since the beginning of the year, driven by strong demand during the COVID-19 pandemic. The relative strength index (RSI) stands at moderate levels of 61.13, but the moving average convergence divergence (MACD) remains in a bullish upswing. These indicators suggest that the stock has more room to run before it reaches overbought levels, while the intermediate-term trend remains bullish.
The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset.
Traders should watch for a breakout from prior highs of around $16.00 to upper trendline resistance near $17.00 over the coming sessions. If the stock moves lower, traders could see a move toward trendline support at around $13.50 or the 50-day moving average at $11.68, although that scenario appears less likely to occur.
The Bottom Line
Nautilus shares moved sharply higher during Wednesday's session after Citron Research published a report saying that revenue growth was tracking much higher than consensus estimates. The analyst believes that the stock could see $30 per share, while technicals suggest that the stock has room to run before approaching overbought levels.
The author holds no position in the stock(s) mentioned except through passively managed index funds.