Better Buy: Lululemon vs. Peloton

If winning stocks are something you're into, then athletic-apparel company lululemon athletica (NASDAQ: LULU) and connected-fitness company Peloton Interactive (NASDAQ: PTON) are for you. Both stocks have outperformed the market averages since going public.

These two companies are delivering outsize financial gains, warranting their impressive stock charts. For Lululemon, it generated revenue of only $453 million in 2009. A decade later, it racked up $4 billion in yearly sales. Peloton doesn't have as much history, but its revenue grew 66% year over year in its fiscal third quarter of 2020, its most recent quarter.

All investors should aspire to hold stocks in companies delivering these kinds of results. But many fear buying Lululemon and Peloton shares because they look expensive by traditional valuation metrics. For example, Peloton trades at 10 times trailing sales, while Lululemon trades at 11 times trailing sales. For perspective, that's more than double the valuation of competitor Nike.

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Source Fool.com