Applied Nutrition Flexes Its Protein Power

Applied Nutrition, a sports nutrition company based in Liverpool, has identified a stock with the potential to be the next Nvidia. The company's protein sales have surged, driven by a growing demand for protein products among gym users, athletes, health-conscious shoppers, and weight-loss drug users. Applied Nutrition has lifted its outlook, expecting revenue to increase by 50% to around £160 million by July 31, 2026, and adjusted EBITDA to rise by 40% to around £43.3 million.

The company's strong performance was evident in its financial year ending July 2023, with revenue of £107 million and adjusted EBITDA of £42 million. Investors have responded positively, with Applied Nutrition shares soaring as much as 9% in London trading. The company's Nutrablend acquisition in June has provided a manufacturing and logistics base in Buffalo, New York, which should help it scale in the US market, where sports nutrition is already large and growing.

While protein prices are rising, Applied Nutrition expects adjusted EBITDA margins to decline slightly in 2027. However, the company's growth in revenue and top line should provide enough cushion to absorb some margin pressure. Applied Nutrition is riding a cleaner consumer trend, with protein demand coming from various sources, including gym users, athletes, health-conscious shoppers, and those using weight-loss drugs to preserve muscle.

The company's business model combines brand, distribution, and speed, allowing it to move quickly into retailers, gyms, and online channels while adjusting its product mix based on consumer preferences.

The company's latest move, the relaunch of Critical Whey, taps into the growing demand for whey-based products, as protein has become a consumer goods sector's favorite magic word. Applied Nutrition's focus on US expansion, new retailer deals, and licensing opportunities, such as the Sour Patch license, will be closely watched by investors. The company's ability to grow revenue while managing input costs will be crucial in determining its long-term success.