Lululemon (LULU) closed at $368.38 in the latest trading session, marking a +0.04% move from the prior day. This change lagged the S&P 500’s 0.33% gain on the day. At the same time, the Dow added 0.3%, and the tech-heavy Nasdaq gained 1.92%.
Prior to today’s trading, shares of the athletic apparel maker had gained 24.94% over the past month. This has outpaced the Consumer Discretionary sector’s gain of 5.57% and the S&P 500’s gain of 5.67% in that time.
Lululemon will be looking to display strength as it nears its next earnings release. In that report, analysts expect Lululemon to post earnings of $1.91 per share. This would mark year-over-year growth of 29.05%. Meanwhile, our latest consensus estimate is calling for revenue of $1.93 billion, up 19.35% from the prior-year quarter.
LULU’s full-year Zacks Consensus Estimates are calling for earnings of $11.48 per share and revenue of $9.37 billion. These results would represent year-over-year changes of +14% and +15.58%, respectively.
It is also important to note the recent changes to analyst estimates for Lululemon. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 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. The Zacks Consensus EPS estimate has moved 1.41% higher within the past month. Lululemon is currently sporting a Zacks Rank of #3 (Hold).
Investors should also note Lululemon’s current valuation metrics, including its Forward P/E ratio of 32.07. This represents a premium compared to its industry’s average Forward P/E of 12.
We can also see that LULU currently has a PEG ratio of 1.6. 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. The Textile – Apparel was holding an average PEG ratio of 1.25 at yesterday’s closing price.
The Textile – Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 107, putting it in the top 43% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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