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

Zacks Equity Research

Lululemon (LULU) closed at $218.21 in the latest trading session, marking a -0.22% move from the prior day. This move lagged the S&P 500's daily gain of 0.9%. At the same time, the Dow added 0.56%, and the tech-heavy Nasdaq gained 1.13%.

Coming into today, shares of the athletic apparel maker had gained 12.18% in the past month. In that same time, the Consumer Discretionary sector gained 17.93%, while the S&P 500 gained 14.3%.

Investors will be hoping for strength from LULU as it approaches its next earnings release. In that report, analysts expect LULU to post earnings of $0.30 per share. This would mark a year-over-year decline of 59.46%. Our most recent consensus estimate is calling for quarterly revenue of $737.25 million, down 5.76% from the year-ago period.

LULU's full-year Zacks Consensus Estimates are calling for earnings of $4.61 per share and revenue of $4.17 billion. These results would represent year-over-year changes of -6.49% and +4.68%, respectively.

Any recent changes to analyst estimates for LULU should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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. Within the past 30 days, our consensus EPS projection has moved 0.89% lower. 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 47.44. This represents a premium compared to its industry's average Forward P/E of 15.71.

Investors should also note that LULU has a PEG ratio of 2.87 right now. 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. The Textile - Apparel was holding an average PEG ratio of 2.45 at yesterday's closing price.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 238, putting it in the bottom 7% 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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