In the latest trading session, Lululemon (LULU) closed at $189.07, marking a +0.7% move from the previous day. This move outpaced the S&P 500's daily gain of 0.69%. At the same time, the Dow added 0.65%, and the tech-heavy Nasdaq gained 0.58%.
Heading into today, shares of the athletic apparel maker had gained 2.8% over the past month, outpacing the Consumer Discretionary sector's loss of 0.77% and the S&P 500's gain of 1.36% in that time.
Investors will be hoping for strength from LULU as it approaches its next earnings release. The company is expected to report EPS of $0.88, up 23.94% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $840.55 million, up 16.18% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.70 per share and revenue of $3.79 billion, which would represent changes of +22.4% and +15.37%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for LULU. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. LULU is currently sporting a Zacks Rank of #2 (Buy).
Investors should also note LULU's current valuation metrics, including its Forward P/E ratio of 39.97. For comparison, its industry has an average Forward P/E of 14.08, which means LULU is trading at a premium to the group.
It is also worth noting that LULU currently has a PEG ratio of 2.17. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Textile - Apparel stocks are, on average, holding a PEG ratio of 1.38 based on yesterday's closing prices.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 153, which puts it in the bottom 41% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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