Tapestry (NYSE:TPR) vs. lululemon athletica (NASDAQ:LULU) Head-To-Head Contrast

lululemon athletica (NASDAQ:LULU) and Tapestry (NYSE:TPR) are both large-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Risk and Volatility

lululemon athletica has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Tapestry has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.

Insider and Institutional Ownership

85.2% of lululemon athletica shares are held by institutional investors. Comparatively, 90.8% of Tapestry shares are held by institutional investors. 0.5% of lululemon athletica shares are held by insiders. Comparatively, 1.3% of Tapestry shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares lululemon athletica and Tapestry”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
lululemon athletica	$11.10 billion	1.09	$1.58 billion	$12.21	8.52
Tapestry	$8.00 billion	2.84	$1.53 billion	$7.29	15.61

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
lululemon athletica	12.78%	27.69%	15.81%
Tapestry	19.09%	254.95%	22.75%

Analyst Recommendations

This is a summary of current ratings and target prices for lululemon athletica and Tapestry, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
lululemon athletica	8	21	0	1	1.80
Tapestry	0	4	15	2	2.90

lululemon athletica currently has a consensus target price of $105.26, suggesting a potential upside of 1.15%. Tapestry has a consensus target price of $171.56, suggesting a potential upside of 50.72%. Given Tapestry’s stronger consensus rating and higher possible upside, analysts clearly believe Tapestry is more favorable than lululemon athletica.

Summary

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

About lululemon athletica

Lululemon Athletica Inc., together with its subsidiaries, designs, distributes, and retails athletic apparel, footwear, and accessories under the lululemon brand for women and men. It offers pants, shorts, tops, and jackets for healthy lifestyle, such as yoga, running, training, and other activities. It also provides fitness-inspired accessories. The company sells its products through a chain of company-operated stores; outlets; interactive workout platform; yoga and fitness studios, university campus retailers, and other partners; license and supply arrangements; and temporary locations, as well as through mobile apps and lululemon.com e-commerce website. It has operations in the United States, Canada, Mainland China, Australia, South Korea, Hong Kong, Japan, New Zealand, Taiwan, Singapore, Malaysia, Macau, Thailand, the Asia Pacific, the United Kingdom, Germany, France, Ireland, Spain, the Netherlands, Sweden, Norway, Switzerland, Europe, the Middle East, and Africa. Lululemon Athletica Inc. was founded in 1998 and is based in Vancouver, Canada.

About Tapestry

Tapestry, Inc. provides luxury accessories and branded lifestyle products in the United States, Japan, Greater China, and internationally. The company operates in three segments: Coach, Kate Spade, and Stuart Weitzman. It offers women’s handbags; and women’s accessories, such as small leather goods which includes mini and micro handbags, money pieces, wristlets, pouches, and cosmetic cases, as well as novelty accessories including address books, time management and travel accessories, sketchbooks, and portfolios; and belts, key rings, and charms. The company also provides men products, which includes bag collections, such as business cases, computer bags, messenger-style bags, backpacks, and totes; small leather goods including wallets, card cases, travel organizers, and belts; and footwear, watches, fragrances, sunglasses, novelty accessories, and ready-to-wear items. In addition, it offers other products including women’s footwear and fragrances; eyewear and sunglasses; and jewelry, such as bracelets, necklaces, rings, and earrings, watches, and other women’s seasonal lifestyle apparel collections, including outerwear, ready-to-wear and cold weather accessories, such as gloves, scarves, and hats. Further, the company provides kids items, housewares, and home accessories, such as fashion bedding and tableware, stationery, and gifts. It offers its products through e-commerce sites and concession shop-in-shops, wholesale, and third-party distributors under the Coach, Kate Spade, and Stuart Weitzman brand names. The company was formerly known as Coach, Inc. and changed its name to Tapestry, Inc. in October 2017. Tapestry, Inc. was founded in 1941 and is headquartered in New York, New York.