Forget Nike: Buy This Magnificent Growth Stock Instead

Core Insights - Lululemon Athletica is outperforming Nike in revenue and earnings growth, with Lululemon reporting 24% revenue growth and 28% EPS growth from fiscal 2018 to fiscal 2023, while Nike's sales increased by only 1% in the latest fiscal quarter [2][4] - Nike's long-term financial targets are not being met, indicating potential challenges in maintaining its dominant market position [2][3] - Lululemon has higher gross and operating margins compared to Nike and continues to see strong demand despite economic challenges [3][4] Company Performance - Lululemon's revenue soared 16% year-over-year in Q4 2023, beating analyst estimates, while Nike's revenue growth is projected at only 1% for the full year [2][4] - Lululemon's shares have increased by 103% over the past five years and 582% over the past decade, although they recently fell 26% after Q4 2023 earnings [4][5] - Nike's market capitalization stands at $143 billion with trailing-12-month revenue of $51.6 billion, while Lululemon's smaller size presents greater long-term growth potential [1][3] Valuation Comparison - Lululemon's forward price-to-earnings ratio is 24.9, slightly lower than Nike's 25.5, despite Lululemon's superior growth prospects [5][6] - The current market conditions suggest a buying opportunity for Lululemon, given its cheaper valuation and better growth outlook compared to Nike [5][6]