Consumer discretionary businesses are levered to the highs and lows of economic cycles. This volatility leads to big swings in stock prices that have worked in their favor recently - over the past six months, the industry has returned 20.1% and beat the S&P 500 by 3.2 percentage points.
Regardless of these results, investors should tread carefully as many companies in this space are unpredictable because they lack recurring revenue business models. Keeping that in mind, here is one consumer stock boasting a durable advantage and two that may face trouble.
Market Cap: $15.46 billion
Originally founded as a necktie company, Ralph Lauren (NYSE:RL) is an iconic American fashion brand known for its classic and sophisticated style.
Why Are We Cautious About RL?
At $247.90 per share, Ralph Lauren trades at 20.6x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than RL.
Market Cap: $9 billion
Founded by two brothers who purchased a struggling gym, Planet Fitness (NYSE:PLNT) is a gym franchise that caters to casual fitness users by providing a friendly and inclusive atmosphere.
Why Do We Think Twice About PLNT?
Planet Fitness is trading at $106.91 per share, or 39.1x forward price-to-earnings. Read our free research report to see why you should think twice about including PLNT in your portfolio, it’s free.
Market Cap: $5.15 billion
Founded in 1949, Grand Canyon Education (NASDAQ:LOPE) is an educational services provider known for its operation at Grand Canyon University.
Why Does LOPE Stand Out?
Grand Canyon Education’s stock price of $179.16 implies a valuation ratio of 21.5x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.
Take advantage of the rebound by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
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