Concern over a potential economic recession is rattling markets again. One stock that can weather the storm is Fox Factory . Fox Factory is known for making a wide range of products used in everything from bikes to off-road vehicles to trucks. The stock is up just 3% year to date and has taken a beating over the past six months, losing 20%. That said, Fox’s high price tags on end products that garner enthusiast-level buyers can help the stock move forward even as the broader economy struggles. “It’s a little bit counterintuitive,” said B. Riley analyst Anna Glaessgen. Say a truck has a price tag of $150,000, “that might not necessarily be where you want to invest into some sort of macro event,” she said. “But at the same time, that’s actually the consumer that’s most resilient. And that’s where we’re seeing demand prove most resilient.” The higher-income and enthusiastic consumer Analysts highlighted two qualities in Fox’s consumer base that help the company weather a broader economic downturn. First, they’re wealthy. Second, they’re invested in their hobbies. Higher-income consumers tend to fare better during periods of economic turmoil. That’s a theme on the minds of many investors amid concerns of a potential recession tied to the Federal Reserve’s interest rate hiking campaign. Truist analyst Michael Swartz said this wouldn’t be the first time the company proves to be more resilient during tough economic times. He pointed to the 2008 financial crisis when Fox’s sales troughed after falling around 8% year over year, while the end markets with a broader consumer base saw demand fall upwards of 30% to 40%. The stock also did well during the throes of the Covid-19 pandemic. In 2020, the stock rallied more than 51%. It surged another 61% the following year. Retail more broadly got a boost during the pandemic, as fiscal and monetary stimulus measures bolstered consumer spending and shutdowns spurred people to buy more goods. But, as the economy reopened and inflation began pinching pocketbooks, companies have struggled to keep consumers buying their products. B. Riley’s Glaessgen said Fox has been largely immune from this issue, given their products cater to enthusiasts rather than passive participants in a hobby. The company’s “sticky” consumer base caught the attention of Motley Fool Asset Management’s Shelby McFaddin, whose Small-Cap Growth ETF (TMFS) contains the stock. “Specialized activities tend to have a greater income and lower income elasticity” in the customer base, McFaddin said. “They’re a little bit cyclical when we think about the business cycle, but they’re not quite as sensitive.” One of its business areas — bicycles — offers a case study of this stickiness. Bicycle makers and sellers have struggled following the Covid-induced boom. Consumers who bought bikes as a way to safely exercise during the pandemic may not have yet needed a new one — or have given up the hobby with the reopening of their gyms or workout studios. Either scenario can make the sales seen at the height of the pandemic hard to sustain. Fox’s focus, though, is on mountain bikes, which tend to be more expensive. While mountain bikes may not have gotten the same influx of consumers that a more relaxed bike did during the pandemic, Glaessgen said the high barrier to entry creates a base that’s more committed. “That’s the type of person that’s theoretically less likely to sacrifice participating in that sport that they clearly care a lot about,” Glaessgen said. She added that the same thought process can be used when looking at power sports and off-road cars, which are the company’s other major business. A ‘favorite idea’ Other reasons to like Fox include the strong brand, solid management and a favorable business model, Truist’s Swartz said. He also said the premium-product focus should grow more popular over the long term as vehicles become more capable and in need of better technology. While there are no competitors covering exactly the same remit as Fox Factory, both Swartz and Glaessgen did draw attention to SRAM’s RockShox. It’s the largest competitor in the business of bike suspensions, which are typically used on mountain bikes to help mitigate rough terrain. But it’s privately owned, leaving Swartz to conclude that there’s no direct peers that are publicly traded. The stock has underperformed the broader market this year. Shares also struggled in 2022 and were especially hard hit as the market soured, falling 46.4%. The last two years have marked a turn from the big gains seen over the prior seven. Despite the rough patch, Wall Street analysts are bullish in the stock. The average analyst has a buy rating and private target implying an upside of more than 31%, according to LSEG. To be sure, there are variables that can affect performance. Most notably, Glaessgen said the company’s auto business is connected to models of Ford Motor and Stellantis ‘ Jeep, making them exposed to the United Auto Workers strike that began earlier this month. “Investors will need to be mindful of near-term volatility that’s out of the company’s hands and detached from their fundamental performance,” she said in reference to the UAW work stoppages. “But long term, we definitely really like this company, see substantial growth opportunity ahead and see it as our favorite idea among our coverage universe.”