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

Zacks Equity Research
·3 min read

Lululemon (LULU) closed the most recent trading day at $315.50, moving -1.19% from the previous trading session. This change lagged the S&P 500's 1.23% gain on the day. At the same time, the Dow added 1.6%, and the tech-heavy Nasdaq gained 0.42%.

Prior to today's trading, shares of the athletic apparel maker had lost 6.38% over the past month. This has lagged the Consumer Discretionary sector's loss of 2.87% and the S&P 500's loss of 2.51% in that time.

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 $0.85 per share. This would mark a year-over-year decline of 11.46%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.01 billion, up 9.98% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.26 per share and revenue of $4.22 billion. These totals would mark changes of -13.59% and +6.05%, respectively, from last year.

Any recent changes to analyst estimates for LULU should also be noted by investors. 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.

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 has moved 3.7% lower. LULU is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, LULU is currently trading at a Forward P/E ratio of 75.02. This represents a premium compared to its industry's average Forward P/E of 33.59.

Meanwhile, LULU's PEG ratio is currently 3.75. 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 6.39 as of yesterday's close.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 34, putting it in the top 14% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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Zacks Investment Research