In the latest close session, Lululemon (LULU) was down 2.38% at $218.69. This move lagged the S&P 500's daily gain of 0.07%. At the same time, the Dow lost 0.7%, and the tech-heavy Nasdaq gained 0.18%.
Prior to today's trading, shares of the athletic apparel maker had lost 3.24% lagged the Consumer Discretionary sector's gain of 4.6% and the S&P 500's gain of 5.71%.
The investment community will be paying close attention to the earnings performance of Lululemon in its upcoming release. The company is forecasted to report an EPS of $2.87, showcasing a 8.89% downward movement from the corresponding quarter of the prior year. Meanwhile, the latest consensus estimate predicts the revenue to be $2.54 billion, indicating a 7.01% increase compared to the same quarter of the previous year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $14.47 per share and a revenue of $11.19 billion, indicating changes of -1.16% and +5.64%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for Lululemon. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.19% decrease. Currently, Lululemon is carrying a Zacks Rank of #4 (Sell).
Valuation is also important, so investors should note that Lululemon has a Forward P/E ratio of 15.48 right now. For comparison, its industry has an average Forward P/E of 15.52, which means Lululemon is trading at a discount to the group.
It is also worth noting that LULU currently has a PEG ratio of 1.9. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. LULU's industry had an average PEG ratio of 2.07 as of yesterday's close.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 227, putting it in the bottom 9% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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lululemon athletica inc. (LULU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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