Here's Why Yeti Is An Extraordinary Business

*This is not financial advice. All content should be considered opinionated. We are not responsible for any of your gains and losses. I am neither a licensed nor a registered financial expert. Please see a financial advisor before making investment decisions.

Since IPO, I've always wondered why Yeti has performed tremendously on the stock market and why investors were really stoked to hear about it being publicly traded. When I looked on their site, they looked like any other outdoor retailer. Since the company is a product-based company and has no source of recurring revenue, I was even more uncomfortable with investing in the company.

This morning, Youtube recommended me to watch a video on How Yeti Became A Billion Dollar Business. While watching it, I started to realize that the cult following was the big reason why Yeti was a great investment opportunity. Like Tesla and Cutco, Yeti's products were really unique and performed really well and that's what gotten people to love the brand. Interestingly, like Cutco, people were always eager to collect more Yeti products. 

Yeti is an impressive growth stock

According to Yeti's latest investor presentation, not only have sales been growing but margins have been growing as well. At the same time, Yeti is a fast-growing direct-to-consumer (DTC) brand that has been profitable for years. Seeing that the company has no issue with making money makes me confident in investing in their business.

Management has noted that while they are an American company, their international operations are quite small compared to other companies close to their size like Under Armor. As people overseas start loving the products and join the Yeti community, Yeti can start developing a cult following overseas. Plus, with a lot more customers overseas, there's a lot of business to be made as well. 

Conclusion

Without knowing about the cult following, Yeti would be seen as another outdoors brand that's solely product-based. With a history of profits and growing sales, Yeti continues to thrive and their stock continues to outperform the stock market. I do regret not investing in Yeti at IPO but at the same time, I am patient for the right buying opportunity. 

During the pandemic, as landmarks are closed and people are yearning to travel, many people are going out into nature for their getaway. Since Yeti products were made for the outdoors, many investors believe that Yeti's sales will skyrocket. Additionally, there's a good chance that Yeti's cult could skyrocket during these times as well, giving the company added support for their bottom line for years to come. 

If you haven't heard of the Yeti cult, I recommend checking this article.