adidas (OTCMKTS:ADDYY) and Peloton Interactive (NASDAQ:PTON) are both large-cap consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.
Risk & Volatility
adidas has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500. Comparatively, Peloton Interactive has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for adidas and Peloton Interactive, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Peloton Interactive has a consensus price target of $140.97, suggesting a potential upside of 30.39%. Given Peloton Interactive’s stronger consensus rating and higher probable upside, analysts clearly believe Peloton Interactive is more favorable than adidas.
Earnings & Valuation
This table compares adidas and Peloton Interactive’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|adidas||$22.67 billion||3.01||$493.47 million||$1.23||141.34|
|Peloton Interactive||$1.83 billion||17.66||-$71.60 million||($0.32)||-337.84|
adidas has higher revenue and earnings than Peloton Interactive. Peloton Interactive is trading at a lower price-to-earnings ratio than adidas, indicating that it is currently the more affordable of the two stocks.
This table compares adidas and Peloton Interactive’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
0.1% of adidas shares are owned by institutional investors. Comparatively, 68.8% of Peloton Interactive shares are owned by institutional investors. 16.5% of Peloton Interactive shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Peloton Interactive beats adidas on 9 of the 14 factors compared between the two stocks.
adidas AG, together with its subsidiaries, designs, develops, distributes, and markets athletic and sports lifestyle products worldwide. The company operates through ten segments: Europe, North America Adidas, North America Reebok, Asia-Pacific, Russia/CIS, Latin America, Emerging Markets, Adidas Golf, Runtastic, and Other Centrally Managed Businesses. It offers footwear; apparel; accessories and gear, such as bags, balls, and fitness equipment; and golf products under the adidas and Reebok brands. The company is also involved in the operation of Runtastic, a digital health and fitness space; and Y-3 label business activities. It sells its products through approximately 2,500 own-retail stores; mono-branded franchise stores; and wholesale distribution, as well as its e-commerce channel. The company was formerly known as adidas-Salomon AG and changed its name to adidas AG in June 2006. adidas AG was founded in 1920 and is headquartered in Herzogenaurach, Germany.
About Peloton Interactive
Peloton Interactive, Inc. provides interactive fitness products in North America and internationally. It offers connected fitness products, such as the Peloton Bike and the Peloton Tread, which include touchscreen that streams live and on-demand classes. The company also provides connected fitness subscriptions for multiple household users, and access to all live and on-demand classes, as well as Peloton Digital app for connected fitness subscribers to provide access to its classes. As of December 09, 2020, it had approximately 3.6 million members. The company markets and sells its interactive fitness products directly through its retail showrooms and at onepeloton.com. Peloton Interactive, Inc. was founded in 2012 and is headquartered in New York, New York.
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