There's pessimism b/c of falling margins. That's basically the whole story. But I'm not worried about falling margins and never have been. But what must you do in the face of falling margins? Add sales. If this company can reach a billion in sales in the next 3-5 years, it will be a good stock to own.
Has anyone noticed that Sears now has TV commercials featuring a lot of NLS products including the selecttech? At least they do in NYC area. I am curious if anyone knows how these are paid for and generally what type of contract was signed with Sears?
Personally, I don't see why the SelectTech alone cannot pull in 50-100 million of revenue a year.
Finally, keep in mind that all it takes is a couple of hot products. Just look at UnderArmour. That stock has pulled a valuation around 2.5X NLS simply because they have some very fashionable products in the athletic clothing area. The fitness industry is not dead or maturing, you just need some good products. But even without breakout new products, I am convinced that these guys could squeeze out more profits from their current sales.