Established apparel giant Under Armour (NYSE:UAA) and upstart activity tracking device maker Fitbit (NYSE:FIT) won't show up together on many stock screens. The first uses superstar athletes to help sell performance clothing and footwear while the latter pours cash into engineering so that its devices can dominate the hot market of wearable technology.

Their recent stock returns are polar opposites, too: Under Armour is up 350% in the last five years while Fitbit's is down 53% since its IPO. Yet each company represents a potentially attractive bet for long-term investors from here.

Here's a big-picture look at how the two companies stack up against each other:


Under Armour


Market cap

$17 billion

$3 billion

Sales growth



Gross profit margin






Forward P/E ratio



Sales growth is for the past complete fiscal year. Data sources: Company financial filings and S&P Global Market Intelligence.

Diversification and track record

The two numbers that really leap out of the above chart are sales growth and forward P/E. Together they demonstrate that investors see Under Armour's earnings outlook as much more reliable than Fitbit's.

Wall Street has good reason to come to that conclusion. After all, Under Armour just logged its 24th consecutive quarter of 20% or better sales growth and net income has more than doubled in the last five years as the company expanded overseas and successfully pushed into new product categories like footwear.

Image source: Under Armour.

Fitbit's track record is much shorter and involves more volatility and risk. Sure, net income doubled last year as sales soared 150%. However, a whopping 80% of the device-maker's revenue came from just two products, the Charge and Surge trackers. While Under Armour generates profits across varied product categories (apparel, footwear, accessories, licensing, and wearable tech) and through different sales channels (wholesale, e-commerce), Fitbit's fortunes are more directly tied to the popularity of just a handful of its latest devices.


The company is therefore ramping up investments in everything from R&D to marketing to sales so that it can build out and protect the solid early lead it has in the wearable tech market. This spending will push profits down, but is necessary to keep sales growth going in the face of competition from deep pocketed rivals like Apple (NASDAQ:AAPL).

The iPhone maker's share of the wearables industry has recently jumped to 15% as Fitbit's declined. While the Apple Watch costs more than Fitbit's devices and is targeted at a different subset of consumers, competing against Apple, even indirectly, is a tall order for any company.

Under Armour has a powerful key competitor too, in Nike (NYSE:NKE). Among the sports apparel titan's biggest competitive advantages is its unmatched marketing muscle: Nike spent $2.4 billion over the last nine months on advertising, brand events, and digital brand marketing. Under Armour can't hope to match that level of support for its products at anything close to its current scale.

Outlook and valuation

Yet Under Armour has demonstrated that it can grow at above-market rates even with big competitors like Nike stomping around the same segments. CEO Kevin Plank and his team also project an impressive 26% sales growth in 2016, illustrating why investors have bid shares up to a rich 47 times next year's earnings. Under Armour's business is in a much stronger position than Fitbit's, but there's a hefty price to pay for that comfort.

Fitbit, at just 10 times earnings, is valued as if it has bleak future, like it might lose its core market to competitors like Apple. There's little evidence of that happening right now: The company just raised its full-year sales outlook. Yet investors deciding to buy this stock have to be comfortable with the risk that Fitbit's next few device launches won't protect its dominance over the rapidly evolving wearable tech market.