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Lululemon (LULU) Gains But Lags Market: What You Should Know

·3 min read

Lululemon (LULU) closed the most recent trading day at $383.62, moving +0.08% from the previous trading session. This change lagged the S&P 500's 0.82% gain on the day.

Coming into today, shares of the athletic apparel maker had gained 6.74% in the past month. In that same time, the Consumer Discretionary sector lost 0.63%, while the S&P 500 gained 3.89%.

Wall Street will be looking for positivity from LULU as it approaches its next earnings report date. In that report, analysts expect LULU to post earnings of $1.15 per share. This would mark year-over-year growth of 55.41%. Meanwhile, our latest consensus estimate is calling for revenue of $1.32 billion, up 46.63% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.94 per share and revenue of $5.91 billion. These totals would mark changes of +47.66% and +34.23%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for LULU. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 3.06% higher within the past month. LULU is currently a Zacks Rank #1 (Strong Buy).

Investors should also note LULU's current valuation metrics, including its Forward P/E ratio of 55.2. Its industry sports an average Forward P/E of 18.38, so we one might conclude that LULU is trading at a premium comparatively.

Investors should also note that LULU has a PEG ratio of 3.01 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Textile - Apparel was holding an average PEG ratio of 1.23 at yesterday's closing price.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 27, putting it in the top 11% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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