3 Stocks to Buy From the Prospering Leisure & Recreation Industry

Core Insights - The Zacks Leisure and Recreation Products industry is experiencing growth due to increased health and fitness awareness, leading to solid demand for fitness products and outdoor recreation items [1][4]. Industry Overview - The industry includes companies that provide a range of recreational products and services, such as amusement products, swimming pools, marine products, and outdoor equipment [2]. - Economic growth is a key driver for the industry, with consumer demand influenced by a healthy labor market, rising wages, and increasing disposable income [2]. Trends Impacting the Industry - The golf sector is thriving, with rising demand for golf equipment driven by technological advancements and increased participation among younger demographics [3]. - There is robust demand for fitness-related products, particularly home workout equipment and digital fitness platforms, as consumers prioritize health and convenience [4]. Economic Context - The U.S. economy is facing mixed conditions in 2025, with resilient consumer spending but challenges from inflation and higher interest rates [5]. - Despite a strong labor market, there are signs of cooling in certain sectors, contributing to a cautious economic outlook [5]. Industry Performance - The Zacks Leisure and Recreation Products industry ranks 56, placing it in the top 23% of over 243 Zacks industries, indicating positive near-term prospects [6][7]. - The industry has underperformed the S&P 500, with a growth of 16% compared to the S&P 500's 19.5% increase over the past year [10]. Valuation Metrics - The industry trades at a forward price-to-earnings ratio of 25.65X, higher than the S&P 500's 23.55X and the sector's 18.45X [13]. Notable Companies - Peloton Interactive, Inc. (PTON): The company reported 552,000 paid app subscriptions and $607 million in total revenues, exceeding guidance. Fiscal 2026 earnings are expected to rise by 123.3% [16][17]. - Topgolf Callaway Brands Corp. (MODG): The company is benefiting from strong consumer demand in golf equipment and effective cost-saving initiatives, with a positive outlook for ongoing operations [22]. - Acushnet Holdings Corp. (GOLF): The company continues to see steady demand for its Titleist golf equipment, with a projected 2% increase in earnings for 2025 [23][24].