Contrasting Crocs (NASDAQ:CROX) and lululemon athletica (NASDAQ:LULU)

Crocs (NASDAQ:CROX) and lululemon athletica (NASDAQ:LULU) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, dividends, profitability, risk, earnings, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Crocs and lululemon athletica”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crocs	$4.10 billion	1.78	-$81.20 million	$13.39	11.95
lululemon athletica	$11.09 billion	1.12	$1.58 billion	$12.21	8.80

lululemon athletica has higher revenue and earnings than Crocs. lululemon athletica is trading at a lower price-to-earnings ratio than Crocs, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

93.4% of Crocs shares are held by institutional investors. Comparatively, 85.2% of lululemon athletica shares are held by institutional investors. 3.1% of Crocs shares are held by company insiders. Comparatively, 0.5% of lululemon athletica shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Crocs has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500. Comparatively, lululemon athletica has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Profitability

This table compares Crocs and lululemon athletica’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Crocs	16.20%	49.35%	15.68%
lululemon athletica	12.78%	27.69%	15.81%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Crocs and lululemon athletica, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crocs	1	4	12	2	2.79
lululemon athletica	7	23	0	1	1.84

Crocs currently has a consensus target price of $158.30, indicating a potential downside of 1.05%. lululemon athletica has a consensus target price of $105.92, indicating a potential downside of 1.43%. Given Crocs’ stronger consensus rating and higher probable upside, analysts clearly believe Crocs is more favorable than lululemon athletica.

Summary

Crocs beats lululemon athletica on 12 of the 15 factors compared between the two stocks.

About Crocs

Crocs, Inc. designs, markets and distributes casual footwear and related accessories. Its products include clogs, sandals, shoes and boots, with customizable Jibbitz charms among its accessories. The company sells products under the Crocs and HEYDUDE brands. Founded in 2002, Crocs became known for its lightweight molded clogs. It expanded its portfolio with the acquisition of casual footwear brand HEYDUDE in 2022. Crocs serves consumers worldwide through wholesale partners, retail stores and e-commerce.

About lululemon athletica

lululemon athletica inc. is a Canadian athletic apparel and lifestyle company founded in Vancouver in 1998. It designs and sells technical clothing and accessories for activities including yoga, running, training and other forms of exercise, as well as everyday wear. Its product range includes apparel for women and men, footwear, bags and other fitness-related accessories. The company sells through its own retail stores and e-commerce channels, serving customers in North America and international markets. lululemon also supports fitness and wellness communities through events and other local initiatives, extending its brand beyond its products and retail operations.