Nautilus Stock Extends Rally as At-Home Fitness Trends Accelerate

Nautilus, Inc. (NLS) shares rose more than 5% during Tuesday's session after Roth Capital raised its price target to $13.00 per share following another major acquisition in the at-home fitness space. The move in Nautilus stock follows Lululemon Athletica Inc.'s (LULU) $500 million acquisition of at-home fitness startup Mirror, which offers weekly live classes, on-demand workouts, and one-on-one personal training sessions. According to Roth Capital analyst George Kelly, most major at-home fitness equipment companies have either raised capital or been acquired over the past several years.

During the first quarter, Nautilus reported revenue that rose 11% to $93.72 million, which was in line with consensus estimates, and GAAP earnings per share of $0.08, which beat consensus estimates by 15 cents per share. The stock fell sharply lower following the earnings announcement since it had been bid up more than 140% over the prior six weeks, reflecting high investor expectations.

From a technical standpoint, the stock broke out to fresh highs of nearly $10.00 per share during Tuesday's move. The relative strength index (RSI) moved further into overbought territory with a reading of 76.04, but the moving average convergence divergence (MACD) remains in a bullish uptrend. These indicators suggest that the stock could see further upside after some consolidation.

Traders should watch for consolidation near trendline support and prior highs of around $9.00 over the coming sessions. If the stock breaks out further, traders could see a move toward fresh all-time highs. If the stock breaks down lower, traders could see a move toward support levels near the 50-day moving average at $6.68, although that scenario appears less likely to occur.

The author has no position in the stock(s) mentioned except through passively managed index funds.