Why Under Armour (UA) Is the Best Fitness and Gym Stock to Buy Now?

They are altering their business strategies, focusing on contract-free and low-price memberships. According to NielsenIQ (NIQ) and World Data Lab (WDL), the global fitness spending by Gen Z is estimated to reach $12 trillion by 2030. Similarly, estimates by Les Mills show that around 36% of Gen Z is active, while 30% use fitness facilities. Around 82% of these facilities include gyms or studios. However, a significant number also take a hybrid approach, training both in and out of the gym.

Owing to these trends, the global online/virtual fitness market is also growing. According to the Global Online/Virtual Fitness Market Report 2023, the industry grew at a CAGR of 39.4%, going from $15.65 billion in 2022 to $21.82 billion in 2023.  It is anticipated to continue on this growth trajectory, growing at a CAGR of 36.9% to reach $76.57 billion by 2027.

The primary driver of this growth is the increasing use of mobile phones and smart devices in the fitness industry. With users increasingly relying on their mobile phones and AI-enabled fitness apps to dictate their fitness and gym journeys, this growth trend is expected to persist.

To compile our list, we sifted through ETFs and online rankings to compile a list of 15 fitness and gym stocks. We then selected the top 10 stocks most popular among elite hedge funds. We sourced the hedge fund data from Insider Monkey’s database. The stocks are arranged in ascending order of the number of hedge funds that have stakes in them as of Q3 2024.

At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Number of Hedge Fund Holders: 28

Under Armour, Inc. (NYSE:UA) develops, markets, and distributes branded athletic performance apparel, accessories, and footwear for men, women, and youth. It operates in four geographic segments: North America, EMEA, Asia-Pacific, and Latin America.

The company’s product offerings continue gaining momentum, including new products in its men’s apparel and footwear businesses. Its initial strategies for fiscal Q2 2025 were focused on its direct-to-consumer (DTC) and e-commerce channels. In such efforts, the company significantly reduced its promotional activities, especially in its e-commerce business in North America. Under Armour, Inc. (NYSE:UA) is also reducing its stock-keeping units (SKUs) to create a more premium product assortment that offers a cleaner and faster consumer experience.

Due to these initiatives, the company’s fiscal Q2 2025 revenue decreased by 11% to $1.4 billion. Its North American DTC business was also down for the quarter, primarily due to a continued decline in its e-commerce business, which resulted from proactive strategies to reduce promotional activities.

Overall, UA ranks 9th on our list of one of the best fitness and gym stocks to buy now. While we acknowledge the potential of UA to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article is originally published at Insider Monkey.