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

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Zacks Equity Research
·3 min read
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In the latest trading session, Lululemon (LULU) closed at $345.89, marking a +1.32% move from the previous day. This move outpaced the S&P 500's daily gain of 0.17%. Meanwhile, the Dow lost 0.02%, and the Nasdaq, a tech-heavy index, added 0.38%.

Coming into today, shares of the athletic apparel maker had lost 3.05% in the past month. In that same time, the Consumer Discretionary sector gained 3.52%, while the S&P 500 gained 2.33%.

Wall Street will be looking for positivity from LULU as it approaches its next earnings report date. On that day, LULU is projected to report earnings of $2.48 per share, which would represent year-over-year growth of 8.77%. Meanwhile, our latest consensus estimate is calling for revenue of $1.66 billion, up 18.74% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for LULU. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.8% higher. LULU is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note LULU's current valuation metrics, including its Forward P/E ratio of 51.33. For comparison, its industry has an average Forward P/E of 20.47, which means LULU is trading at a premium to the group.

It is also worth noting that LULU currently has a PEG ratio of 2.8. 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. Textile - Apparel stocks are, on average, holding a PEG ratio of 2.18 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 72, which puts it in the top 29% 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.

To follow LULU in the coming trading sessions, be sure to utilize Zacks.com.


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