Comparing Li-Ning (LNNGY) & Lululemon Athletica (LULU)

Li-Ning (OTCMKTS: LNNGY) and Lululemon Athletica (NASDAQ:LULU) are both retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, analyst recommendations, profitability, earnings and valuation.

Analyst Ratings

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This is a breakdown of current ratings for Li-Ning and Lululemon Athletica, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Li-Ning 0 0 0 0 N/A
Lululemon Athletica 0 15 21 0 2.58

Lululemon Athletica has a consensus price target of $82.38, suggesting a potential downside of 14.46%. Given Lululemon Athletica’s higher possible upside, analysts plainly believe Lululemon Athletica is more favorable than Li-Ning.

Institutional & Insider Ownership

80.2% of Lululemon Athletica shares are held by institutional investors. 0.3% of Lululemon Athletica 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.

Risk & Volatility

Li-Ning has a beta of -0.77, meaning that its stock price is 177% less volatile than the S&P 500. Comparatively, Lululemon Athletica has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500.

Profitability

This table compares Li-Ning and Lululemon Athletica’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Li-Ning N/A N/A N/A
Lululemon Athletica 9.76% 24.59% 20.21%

Earnings and Valuation

This table compares Li-Ning and Lululemon Athletica’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Li-Ning $1.21 billion 2.08 $96.80 million $0.43 67.05
Lululemon Athletica $2.65 billion 4.92 $258.66 million $2.59 37.19

Lululemon Athletica has higher revenue and earnings than Li-Ning. Lululemon Athletica is trading at a lower price-to-earnings ratio than Li-Ning, indicating that it is currently the more affordable of the two stocks.

Summary

Lululemon Athletica beats Li-Ning on 12 of the 13 factors compared between the two stocks.

Li-Ning Company Profile

Li Ning Company Limited engages in the research, development, design, manufacture, marketing, distribution, and retail of sporting goods in the People's Republic of China. The company offers sporting goods, including footwear, apparel, equipment, and accessories for professional and leisure purposes primarily under the LI-NING brand. It also develops, manufactures, markets, distributes, and/or sells outdoor sports products under the AIGLE brand; fashionable fitness products for dance and yoga under the Danskin brand; and sports fashion products under the Lotto brand, as well as badminton equipment under the Kason brand. As of December 31, 2016, the company operated 6,440 LI-NING brand conventional stores, flagship stores, factory outlets, and discount stores. Li Ning Company Limited was incorporated in 2004 and is headquartered in Beijing, the People's Republic of China.

Lululemon Athletica Company Profile

lululemon athletica inc., an athletic apparel company, together with its subsidiaries, designs, distributes, and retails athletic apparel and accessories for women, men, and female youth. It operates through two segments, Company-Operated Stores and Direct to Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle and athletic activities, such as yoga and running; other sweaty pursuits; and athletic wear for female youth. It also provides fitness-related accessories, including bags, socks, underwear, yoga mats, and water bottles. The company sells its products through a chain of company-operated stores; outlets and warehouse sales; a network of wholesale accounts, such as yoga studios, health clubs, and fitness centers; license and supply arrangements; and showrooms, as well as directly to consumer through lululemon.com and ivivva.com e-commerce sites. As of January 29, 2017, it operated 406 company-operated stores under the lululemon and ivivva brands in the United States, Canada, Australia, the United Kingdom, New Zealand, China, Hong Kong, Singapore, South Korea, Germany, Puerto Rico, and Switzerland. lululemon athletica inc. was founded in 1998 and is based in Vancouver, Canada.

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