Shares of Adidas (ADDYY - Free Report) soared over 9% Thursday after the German sportswear company reported strong second-quarter results, boosted by e-commerce expansion and growth in North America and China. But rival Nike (NKE - Free Report) also thrived in its most recent quarter. So let’s take a look at which sportswear stock looks like the better buy at the moment.

Adidas

Adidas saw its quarterly revenues jumped 10% on a currency neutral basis—up 4% in euro terms—to 5.26 billion euros ($6.1 billion). The firm posted quarterly net profit of 396 million euros ($459.6 million), up from 158 million euros in the previous-year period. More importantly, North American sales jumped roughly 16% to 1.08 billion euros, while revenues in Greater China surged 27%.

Furthermore, Adidas brand revenues jumped 12%, boosted by growth in the firm’s training, running, and football (soccer) units. Investors should also note that the firm’s direct-to-consumer sales climbed at a double-digit rate, with e-commerce sales up 26%, outpacing Adidas’ single-digit wholesale expansion. “With these results, we remain firmly on track to achieve our set targets for the full year 2018 and long term until 2020,” Adidas CEO Kasper Rorsted said in a statement.

Clearly, Adidas had a strong quarter of growth in two of the largest markets in the world. Plus, the company’s direct-to-consumer sales will be a key part of its expansion going forward.

Nike

But let’s not forget that Adidas’ Oregon-based competitor posted strong fiscal Q4 results in late June. Nike’s quarterly revenues climbed by 13% to hit $9.79 billion. Nike also saw its North American sales pop 3% to hit $3.88 billion, after three straight quarters of declines.

Nike’s sales in Greater China skyrocketed 35% to $1.47 billion, with Jordan Brand up nearly 50%. Investors should note that Nike’s growth in Europe and China outpaced Adidas. Nike also said on its earnings call that Nike Direct drove over 90% of its growth for the year, with digital sales up 41% in Q4.

Nike, like Under Armour (UAA - Free Report) and other sports retailers, has concentrated on e-commerce sales as the likes of Foot Locker (FL - Free Report) and Dick’s Sporting Goods (DKS - Free Report) continue to decline. Nike’s digital push includes initiatives such as the SNKRS app and its NikePlus memberships, as well as partnerships with Amazon (AMZN - Free Report) , Chinese e-commerce power JD.Com (JD - Free Report) , and even Facebook’s (FB - Free Report) Messenger app.

Price Movement

Heading into Thursday, Nike stock had outpaced ADDYY over the last five years, up roughly 144% compared to Adidas’ 115%. However, over the last three years, shares of Adidas have skyrocketed nearly 200%, while Nike rose just 40%.

The race between the two sports apparel powers is neck and neck over the last 24 months, but Nike has crushed ADDYY over the last year. Furthermore, Nike shares hit a brand new 52-week and all-time high Thursday.

Valuation

Moving on, Nike stock is currently trading at 29.8X forward 12-month Zacks Consensus EPS estimates, which marks a significant premium compared to Adidas’ 21.2X and its industry’s 22.1X. NKE has traded as low as 21X over the last year, with a one-year median of 25.6X. The U.S. firm is currently trading at not only its one-year but also its five-year high, which means that its valuation picture appears stretched at the moment.

Meanwhile, Adidas has traded as high as 28.3X over the last year and as low as 20.5X, with a one-year median of 23.5X. Therefore, Adidas is currently trading near its year-long low, and clearly offers better value than NKE.

Outlook

Looking ahead, NKE is projected to see its quarterly revenues pop by over 8.5% to hit $9.85 billion, based on our current Zacks Consensus Estimate. In fiscal 2019, Nike’s revenues are expected to climb by 7.8% to $39.25 billion. Meanwhile, Nike’s quarterly earnings are expected to jump by 7%, while its full-year EPS figure is projected to pop by 7.8%.

Adidas is projected to see its full-year revenues climb 8.4% to $26.24 billion, while its fiscal 2018 earnings are expected to surge nearly 20%.

Bottom Line

The Nike and Adidas rivalry is as strong as ever, even as the likes of Puma and athleisure firm Lululemon (LULU - Free Report) expand. Nike and Adidas are both currently Zacks Rank #3 (Hold) stocks, though Adidas’ rank could change based on Thursday’s results.

Investors can clearly see that both companies are positioned well for the future, and are poised to grow in key regions in the right ways. Still, at this moment, it seems that Adidas might take the edge over Nike based on its valuation and stronger earnings growth outlook.