wonder if the founder needs to sell more shares. My predication is the company will issue a lower est for the next qtr which will tank the stock. Long term growth is limited to wealthy mostly white and fit women.
Upgrade from CS today. Shorts just don't get it. Too bad !
“We are increasingly confident in Lululemon’s ability to sustain double-digit comps, achieve a 30%-plus operating margins, and drive earnings power north of $5.00. As a result, we are raising our F2013/F2014 estimates to $1.69/$2.26 (from $1.60/$2.06). … Analysis of assortments across three markets (New York, Pittsburgh, Toronto) highlights: 1) continued stock-out issues in mature markets; 2) full priced selling across the chain even with increasing breadth of assortments; and 3) the magnitude of the “catch-up” opportunity in secondary markets as brand awareness ramps.”
Even if these new numbers are meet and considering a normal 20 PE on $2.26 the price per share would only be $45. The shares are now $68 so the PE for 2014 assuming the price point stayed the same would be over 30. Based on this all future growth should be accounted for at today's share price and this assumes no missteps along the way, no competition, and no problems with the economy. This does mean that the share price can't go up it just means using standard metrics Lulu should be fully valued.
Of course, they have a lot of shares to dump on retail investors.
There is a reason that money continues to flow out of funds and into ETFs. Simply stated, individual investors no longer trust Wall Street.
Wall Street groupthink has taken over. Everyone believes that inflationary risks are dominant. In reality, the eventual collapse of the credit bubble (which will necessarily happen because so many individuals and institutions are insolvent) will lead to a deflationary cycle. The Fed and other central banks are simply trying to provide massive liquidity to prevent a self accelerating asset fire sale.
Groupthink creates momentum and the market trades on momentum, so pumpers are feeling brilliant right now. But, the reality is we are coming up against some pretty fundamental constraints. Absent recession, oil will continue to rise, especially in dollar terms if the Fed continues to print. That will further reduce the credit quality of the majority of the nation's borrowers, increasing delinquencies on debt of all kinds. Looking forward to 2013, we have expiration of Bush tax cuts, expiration of payroll tax holiday and some actual spending cuts kicking in... Negative stimulus across the board.
This MOMO ponzi scheme will end soon enough, but those that see it need to position themselves for the longer term. It will likely be end of 2012 as the markets cannot ignore all the pain that it will feel in 2013...