Analyzing Lululemon Athletica (LULU) and Talon International (TALN)

Lululemon Athletica (NASDAQ: LULU) and Talon International (OTCMKTS:TALN) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Institutional and Insider Ownership

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80.2% of Lululemon Athletica shares are owned by institutional investors. Comparatively, 0.0% of Talon International shares are owned by institutional investors. 0.3% of Lululemon Athletica shares are owned by company insiders. Comparatively, 20.3% of Talon International 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.

Profitability

This table compares Lululemon Athletica and Talon International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lululemon Athletica 9.76% 24.59% 20.21%
Talon International 1.10% 6.37% 2.37%

Volatility and Risk

Lululemon Athletica has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500. Comparatively, Talon International has a beta of 2.35, suggesting that its share price is 135% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Lululemon Athletica and Talon International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lululemon Athletica 1 15 20 0 2.53
Talon International 0 0 0 0 N/A

Lululemon Athletica presently has a consensus price target of $80.74, suggesting a potential downside of 9.41%. Given Lululemon Athletica’s higher probable upside, analysts plainly believe Lululemon Athletica is more favorable than Talon International.

Earnings and Valuation

This table compares Lululemon Athletica and Talon International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lululemon Athletica $2.65 billion 4.55 $303.38 million $2.59 34.41
Talon International $48.26 million 0.14 $990,000.00 N/A N/A

Lululemon Athletica has higher revenue and earnings than Talon International.

Summary

Lululemon Athletica beats Talon International on 10 of the 12 factors compared between the two stocks.

About Lululemon Athletica

lululemon athletica inc. is a designer, distributor and retailer of athletic apparel. The Company operates through two segments: Company-operated stores and Direct to consumer. It is also engaged in the sale from outlets, showrooms, sales from temporary locations, sales to wholesale accounts, warehouse sales, and license and supply arrangements. Its direct to consumer segment generates revenue from its lululemon and ivivva e-commerce Websites, www.lululemon.com and www.ivivva.com, and other country and region specific Websites. It offers a range of apparel and accessories for women, men and female youth. The Company’s apparel assortment includes items, such as pants, shorts, tops, and jackets designed for healthy lifestyle and athletic activities, such as yoga, running, training, most other sweaty pursuits, and athletic wear for female youth. The Company also offers fitness-related accessories, including an array of items, such as bags, socks, underwear, yoga mats and water bottles.

About Talon International

Talon International, Inc. is a holding company, which specializes in the manufacturing and distribution of a range of apparel components and accessories, including custom zippers, apparel trim components and specialty stretch technology for interlinings. The Company distributes a range of apparel zipper, trim and interlining products to manufacturers of fashion apparel, specialty retailers and mass merchandisers. It operates its business under approximately two product groups, such as Talon Zipper and Talon Trim (which includes its Tekfit stretch technology products). It manufactures and distributes zippers under its Talon brand name to manufacturers for apparel brands and retailers. Talon Trim items include labels, buttons, leather patches, woven labels and others. Under its Tekfit brand, it develops and sells fabric stretch technology that utilizes processes to create stretchable comfort waistbands, shirt collars and inner pocketing panels.

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