Reviewing Fossil Group (NASDAQ:FOSL) & Under Armour (NYSE:UAA)

Fossil Group (NASDAQ:FOSL) and Under Armour (NYSE:UAA) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Profitability

This table compares Fossil Group and Under Armour’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fossil Group	-7.09%	-59.76%	-7.53%
Under Armour	-9.99%	4.04%	1.37%

Insider & Institutional Ownership

61.1% of Fossil Group shares are held by institutional investors. Comparatively, 34.6% of Under Armour shares are held by institutional investors. 3.8% of Fossil Group shares are held by insiders. Comparatively, 15.7% of Under Armour shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Fossil Group and Under Armour, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fossil Group	1	1	3	1	2.67
Under Armour	4	9	1	1	1.93

Fossil Group presently has a consensus price target of $9.25, indicating a potential upside of 41.22%. Under Armour has a consensus price target of $5.77, indicating a potential upside of 18.13%. Given Fossil Group’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Fossil Group is more favorable than Under Armour.

Earnings and Valuation

This table compares Fossil Group and Under Armour”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fossil Group	$1.00 billion	0.39	-$78.30 million	($1.28)	-5.12
Under Armour	$4.97 billion	0.42	-$495.64 million	($1.15)	-4.25

Fossil Group has higher earnings, but lower revenue than Under Armour. Fossil Group is trading at a lower price-to-earnings ratio than Under Armour, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Fossil Group has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, Under Armour has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500.

Summary

Under Armour beats Fossil Group on 8 of the 14 factors compared between the two stocks.

About Fossil Group

Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. The company’s products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts, and sunglasses. It also manufactures and distributes private label brands, as well as branded products purchased for resell in other branded retail stores. The company offers its products under its proprietary brands, such as FOSSIL, SKAGEN, MICHELE, RELIC, and ZODIAC; and under the licensed brands, including ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, TORY BURCH, and Skechers. The company sells its products through company-owned retail and outlet stores, department and specialty retail stores, mass market stores, e-commerce sites, licensed and franchised FOSSIL retail stores, and retail concessions, as well as sells its products on airlines. The company was formerly known as Fossil, Inc. and changed its name to Fossil Group, Inc. in May 2013. Fossil Group, Inc. was founded in 1984 and is headquartered in Richardson, Texas.

About Under Armour

Under Armour, Inc., together with its subsidiaries, engages developing, marketing, and distributing performance apparel, footwear, and accessories for men, women, and youth. The company provides its apparel in compression, fitted, and loose fit types. It also offers footwear products for running, training, basketball, cleated sports, recovery, and outdoor applications. In addition, the company provides accessories, which include gloves, bags, headwear, and socks; and engages in brand licensing, digital subscription, advertising, and other digital business activities. It primarily offers its products under the UNDER ARMOUR, ARMOUR, HEATGEAR, COLDGEAR, HOVR, UA, PROTECT THIS HOUSE, I WILL, ARMOUR FLEECE, and ARMOUR BRA brands. The company sells its products through wholesale channels, including national and regional sporting goods chains, independent and specialty retailers, department store chains, mono-branded Under Armour retail stores, institutional athletic departments, and leagues and teams, as well as independent distributors; and directly to consumers through Brand and Factory House stores, as well as through e-commerce websites. It operates in the United States, Canada, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. The company was incorporated in 1996 and is headquartered in Baltimore, Maryland.