The Lulumeon Analyst: Matthew McClintock reiterated a Strong Buy rating on Lululemon.
The Lululemon Thesis: McClintock estimated that Mirror has the potential to reach $2.5 billion in revenue and contribute an additional 50 cents to Lululemon's EPS by 2023.
The analyst named the following as growth drivers:
- Mirror’s partnership with Lululemon creates a potential distribution advantage over other fitness brands.
- Mirror could reach over 2 million subscribers by 2023.
- Mirror’s customer acquisition costs will be lower considering the traffic levels in Lululemon’s physical shops.
- Mirror expands Lulu’s reach to a larger digital platform that has been intensified by the pandemic and the need for an at-home fitness device market.
To that end, “Mirror is perfectly positioned to capture more than its fair share,” McClintock said.
LULU Price Action: Lululemon shares ended Wednesday's session 2.97% higher at $345.33.
Public domain photo via Wikimedia.
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