LULU vs MRK: Which Is the Better Buy?
Side-by-side comparison of Lululemon Athletica Inc. and Merck & Co., Inc. — fair value, conviction, valuation metrics, and QuantHub research signals.
Updated 2026-09-21.
Lululemon Athletica Inc. · Consumer Cyclical
$98.06
+1.5% upside to fair value
Low Conviction
Grade C
VS
Merck & Co., Inc. · Healthcare
$147.17
-4.1% upside to fair value
Med Conviction
Grade C
QuantHub Verdict
LULU has more upside to fair value
(+1.5%).
These are model outputs — not personalized investment advice.
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Valuation & Fundamentals
| Metric |
LULU |
MRK |
| Current Price |
$98.06 |
$147.17 |
| Fair Value Estimate |
$99.50 |
$141.07 |
| Upside to Fair Value |
+1.5%
|
-4.1%
|
| Market Cap |
$11.1B |
$363.5B |
| Forward P/E |
—
|
—
|
| EV / EBITDA |
4.6x
|
29.6x
|
| Price / Sales |
1.0x
|
5.5x
|
| Price / FCF |
8.2x
|
22.6x
|
| Revenue Growth YoY |
-4.3%
|
+5.1%
|
| Gross Margin |
56.1%
|
75.4%
|
| Operating Margin |
17.8%
|
16.7%
|
| Return on Equity |
29.7%
|
6.6%
|
| Dividend Yield |
0% |
2.31% |
| FCF Yield |
12.24%
|
4.42%
|
| Analyst Consensus |
Sell
|
Buy
|
Investment Thesis
Lululemon Athletica designs and retails premium athletic apparel and accessories through company-owned stores and direct-to-consumer channels, with roughly 39,000 employees and a brand built on technical fabrics and community-led fitness positioning. The business still earns high returns on equity of 29.7% and generates $12.00 of free cash flow per share on $97.70 of revenue per share, with TTM g…
Merck & Co., Inc. is a global healthcare leader with two core divisions, Pharmaceuticals and Animal Health, spanning oncology, vaccines, acute hospital care, immunology, neuroscience, virology, cardiovascular and diabetes, and it employs roughly 74,000 people under CEO Robert Davis. The business quality is medium: TTM gross margin of 75.4% and TTM operating margin of 16.7% reflect a genuinely hig…
Accumulation Zones
| Metric |
LULU |
MRK |
| Zone Low |
$74.62 |
$105.80 |
| Zone High |
$84.58 |
$119.91 |
| In Buy Zone? |
No
|
No
|