Is VOO Near an All-Time High a Better Buy Than Lululemon Stock Trading Under $105 Per Share?
2026-09-27 17:18
•Neil Patel •The Motley Fool
•••• •• Axe Cap view
VOO vs. Lululemon: Stick with the Index over a Risky Retail Bet
With Lululemon’s struggles piling up, VOO’s broad market exposure makes more sense for South African investors.
Lululemon’s recent earnings tell a tough story—a 4% revenue drop and a 9% fall in same-store sales are red flags in the retail apparel space. While the stock looks cheap at a P/E of 8.3 after losing 80% from its peak, value traps are common in this kind of momentum-driven sector. Investors chasing a turnaround could get burned. On the flip side, VOO, an ETF tracking the entire S&P 500, offers a safer way to capture U.S. market growth without single-stock risk. Its 319% return over the last decade speaks to steady wealth creation. From a South African perspective, supporting VOO means exposure to the USD, which tends to strengthen during global uncertainty—helping the rand hedge. That said, if the global recovery surprises to the upside, Lululemon might rebound faster than expected. this is just our opinion and not financial advice
Avoid Lululemon for now; stick with VOO for broad U.S. market exposure as a rand hedge and diversification play. Keep a watchful eye on consumer trends before reconsidering retail stocks.
- VOO
- USD/ZAR
- Lululemon turnaround may happen sooner than expected
- USD/ZAR could weaken if global risk appetite surges
6/10
The article compares the Vanguard S&P 500 ETF (VOO) trading near all-time highs with Lululemon stock trading under $105. Despite Lululemon's attractive valuation at a P/E of 8.3 after an 80% decline from its peak, the author recommends VOO as the superior investment. Lululemon has struggled with a 4% revenue decline and 9% same-store sales drop in its latest quarter, while VOO offers diversified exposure to the broad U.S. market with a 319% return over the past decade.
Our take is based on reporting first published by The Motley Fool.