Activewear retailer lululemon athletica (LULU -2.52%) impressed investors on Wednesday with a strong fourth-quarter report. Same-store sales jumped 6%, while direct-to-consumer sales soared 37%. Those results drove the company's total revenue up 26% year over year, ahead of analyst estimates.

This good news pushed shares of Lululemon to an all-time high on Thursday. But while the company's results were certainly impressive, the stock carries a lofty valuation that leaves little room for error. Shares of Lululemon now trade for around 43 times adjusted earnings.

Lululemon can still generate market-beating returns if rapid earnings growth continues. But that requires the brand to remain in vogue with consumers, something that the company has struggled with at times in the past.

Women exercising.

Image source: Lululemon.

There's another fast-growing activewear brand that's putting up impressive numbers, and it's part of a company that trades at a depressed valuation. I'm talking about Champion, owned by Hanesbrands (HBI -2.33%). If you're looking to bet on the activewear trend but unwilling to pay a hefty premium for Lululemon, Hanesbrands is the answer.

A fast-growing brand

Hanesbrands is best known for Hanes, a leading brand of men's underwear, socks, and other basic apparel. But activewear is becoming an increasingly important part of the business. Activewear accounted for 37% of total revenue in 2018. Hanesbrands sells some activewear under the Hanes brand, but its core activewear brand is Champion.

Champion is a 100-year-old brand that's seeing a surge in popularity. While Hanesbrands' innerwear business has been stagnating, growth in activewear, and Champion in particular, has helped pick up the slack.

Champion generated $1 billion of sales back in 2017. Its growth since then has been impressive. Champion revenue soared 36% in 2018, and Hanesbrands expects it to grow another 29% in 2019. The company has set a goal of reaching $2 billion of Champion revenue by 2022, and it's ahead of schedule so far.

Check out the latest earnings call transcript for Hanesbrands.

The Champion logo inside of a store.

Image source: Champion.

These numbers exclude C9 by Champion, a line of Champion-branded clothing sold exclusively by Target. Target has opted to drop that line after its contract ends in 2020, likely to focus on its own private-label brands. In the trailing-12-month period prior to Target's decision, C9 generated an additional $380 million of revenue for Hanesbrands.

Losing the C9 contract stung, but the Champion brand isn't missing a beat. Hanesbrands set its $2 billion revenue goal prior to the C9 news, and the brand should have no trouble hitting that target even without that additional revenue.

A very cheap stock

Hanesbrands overall isn't growing all that fast, but the company did have an exceptional fourth quarter. Organic sales grew by 6% adjusted for currency, the best result in years. The domestic innerwear business trod water while Champion and the international segment grew.

Hanesbrands isn't a growth company like Lululemon, so it shouldn't be priced like one. But the market has gotten way too pessimistic, especially given the long-term growth potential of Champion. Hanesbrands stock trades for just 10 times the company's earnings guidance for 2019. And that's after a 40% surge so far this year. The stock was a screaming bargain in December.

You could pay more than 40 times earnings for market darling Lululemon, or you could pay just 10 times earnings for beaten-down Hanesbrands. The choice seems clear to me.