Ralph Lauren currently trades at $273.03 and has been a dream stock for shareholders. It’s returned 286% since June 2020, nearly tripling the S&P 500’s 97.4% gain. The company has also beaten the index over the past six months as its stock price is up 17.9% thanks to its solid quarterly results.
Is now the time to buy Ralph Lauren, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.
Why Is Ralph Lauren Not Exciting?
We’re happy investors have made money, but we don't have much confidence in Ralph Lauren. Here are three reasons why there are better opportunities than RL and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, Ralph Lauren’s sales grew at a weak 2.8% compounded annual growth rate over the last five years. This fell short of our benchmarks. 
2. Weak Constant Currency Growth Points to Soft Demand
In addition to reported revenue, constant currency revenue is a useful data point for analyzing Apparel and Accessories companies. This metric excludes currency movements, which are outside of Ralph Lauren’s control and are not indicative of underlying demand.
Over the last two years, Ralph Lauren’s constant currency revenue averaged 5.1% year-on-year growth. This performance was underwhelming and suggests it might have to lower prices or invest in product improvements to accelerate growth, factors that can hinder near-term profitability. 
3. Projected Revenue Growth Is Slim
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Ralph Lauren’s revenue to rise by 4.6%, close to its 2.8% annualized growth for the past five years. This projection doesn't excite us and suggests its newer products and services will not lead to better top-line performance yet.
Final Judgment
Ralph Lauren isn’t a terrible business, but it isn’t one of our picks. With its shares topping the market in recent months, the stock trades at 20.1× forward P/E (or $273.03 per share). This valuation tells us a lot of optimism is priced in - you can find more timely opportunities elsewhere. We’d recommend looking at one of Charlie Munger’s all-time favorite businesses.
Stocks We Would Buy Instead of Ralph Lauren
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
