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Lululemon (LULU) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Lululemon (LULU) closed at $182.35, marking a +1.29% move from the previous day. The stock outpaced the S&P 500's daily gain of 1.1%. Elsewhere, the Dow gained 1.05%, while the tech-heavy Nasdaq added 1.32%.

Coming into today, shares of the athletic apparel maker had lost 5.85% in the past month. In that same time, the Consumer Discretionary sector lost 7.37%, while the S&P 500 lost 5.05%.

Wall Street will be looking for positivity from LULU as it approaches its next earnings report date. This is expected to be September 5, 2019. On that day, LULU is projected to report earnings of $0.89 per share, which would represent year-over-year growth of 25.35%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $842.41 million, up 16.43% from the year-ago period.

LULU's full-year Zacks Consensus Estimates are calling for earnings of $4.70 per share and revenue of $3.80 billion. These results would represent year-over-year changes of +22.4% and +15.46%, respectively.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% higher. LULU currently has a Zacks Rank of #3 (Hold).

Digging into valuation, LULU currently has a Forward P/E ratio of 38.29. This valuation marks a premium compared to its industry's average Forward P/E of 13.1.

Meanwhile, LULU's PEG ratio is currently 2.08. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LULU's industry had an average PEG ratio of 1.26 as of yesterday's close.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 38, which puts it in the top 15% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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