Market reaction to COLM’s 2Q17 results
Columbia Sportswear (COLM) stock rose 7.5% on July 28, 2017, in response to its better-than-expected 2Q17 results. The company’s YTD (year-to-date) losses were converted to gains. It’s now sitting at a YTD profit of 6.4%.
In comparison, sportswear rivals Lululemon Athletica (LULU) and Under Armour (UA) have fallen 5.0% and 33.0%, respectively, so far this year. However, sportswear giant Nike (NKE) has risen more than 15.0% YTD.
The seven-company S&P 500 Apparel and Accessories Index is also positive, rising ~7.0% YTD. In comparison, the S&P 500 Index (SPX-INDEX) has risen 10.4% to date.
Valuations and earnings potential
Columbia Sportswear is cheaper than most sportswear players. The company is currently valued at a one-year forward PE (price-to-earnings) ratio of 22.0x, which is in line with its three-year PE average ratio of 21.8x. In comparison, Nike, LULU, and UAA are trading at 24.0x, 26.0x, and 46.0x, respectively.
Looking at COLM’s near-term earnings potential, its earnings are predicted to rise 4.1% over the next 12 months (or NTM). Nike’s and Under Armour’s NTM earnings are likely to fall 22.0% and 3.4%, respectively. LULU has stronger earnings expectations of a 9.0% rise in NTM earnings.
ETF investors seeking to add exposure to COLM can consider the First Trust Mid Cap Value AlphaDEX ETF (FNK), which invests 0.44% of its portfolio in the company.