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Actionable news in UA: UNDER ARMOUR Inc,

Better Buy: Under Armour, Inc. vs. Fitbit, Inc.

Established apparel giant Under Armour (NYSE:UA) and upstart activity tracking device maker Fitbit (NYSE:FIT) won't show up together on many stock screens. The first uses superstar athletes to help sell performance clothing and footwear while the latter pours cash into engineering so that its devices can dominate the hot market of wearable technology.

Their recent stock returns are polar opposites, too: Under Armour is up 350% in the last five years while Fitbit's is down 53% since its IPO. Yet each company represents a potentially attractive bet for long-term investors from here.

Here's a big-picture look at how the two companies stack up against each other:

Metric

Under Armour

Fitbit

Market cap

$17 billion

$3 billion

Sales growth

28%

149%

Gross profit margin

48%

49%

Price-to-sales

4.1

1.5

Forward P/E ratio

47

10

Sales growth is for the past complete fiscal year. Data sources: Company financial filings and S&P Global Market Intelligence.

Diversification and track record

The two numbers that really leap out of the above chart are sales growth and forward P/E. Together they demonstrate that investors see Under Armour's earnings outlook as much more reliable than Fitbit's.

Wall Street has good reason to come to that conclusion. After all, Under Armour just logged its 24th consecutive quarter of 20% or better sales growth and net income has more than doubled in the last five years as the company expanded overseas and successfully pushed into new product categories like footwear.

Image source: Under Armour.

Fitbit's track record is much shorter...


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