'They're Expensive... But You Have To Pay For Outsized Growth': Jim Cramer Discusses On Holding, Hoka Vs. Nike
Portfolio Pulse from Michael Cohen
Jim Cramer discussed the challenges facing the athletic apparel industry, highlighting the struggles of Nike and Lululemon, while praising the growth of On Holding and Deckers Outdoor. Despite high valuations, Cramer emphasized the potential for outsized growth in these companies.
May 17, 2024 | 1:17 pm
News sentiment analysis
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NEGATIVE IMPACT
Lululemon's stock has dropped nearly 35% from its all-time highs, facing competition from Gap's Athleta and Levi's Beyond Yoga. The company anticipates 11-12% growth, falling short of Wall Street's expectations.
Lululemon's significant stock drop and growth falling short of expectations suggest a potential short-term negative impact on its stock price.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 100
NEGATIVE IMPACT
Nike is facing growth challenges with only 1-2% revenue growth expected this year. The stock has underperformed for over two years.
Nike's low expected revenue growth and prolonged stock underperformance indicate potential short-term negative impact on its stock price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Deckers Outdoor, driven by the success of Hoka running shoes, has seen its stock surge 513% since 2019. The company benefits from direct-to-consumer business and international expansion.
Deckers Outdoor's significant stock surge and successful growth strategies suggest a potential short-term positive impact on its stock price.
CONFIDENCE 95
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
On Holding has shown remarkable resilience with 21% revenue growth, driven by strong demand and direct-to-consumer sales up 39% year-over-year.
On Holding's strong revenue growth and direct-to-consumer sales indicate a potential short-term positive impact on its stock price.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100