In the latest close session, Lululemon (LULU) was down 2.73% at $191.14. This change lagged the S&P 500's daily loss of 0.08%. Meanwhile, the Dow lost 0.51%, and the Nasdaq, a tech-heavy index, added 0.35%.
Shares of the athletic apparel maker have depreciated by 16.69% over the course of the past month, underperforming the Consumer Discretionary sector's loss of 4.47%, and the S&P 500's gain of 1.21%.
The upcoming earnings release of Lululemon will be of great interest to investors. The company is expected to report EPS of $2.86, down 9.21% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $2.53 billion, indicating a 6.91% growth compared to the corresponding quarter of the prior year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $14.42 per share and a revenue of $11.18 billion, representing changes of -1.5% and +5.6%, respectively, from the prior year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Lululemon. 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 business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.47% lower. Lululemon is currently sporting a Zacks Rank of #4 (Sell).
Digging into valuation, Lululemon currently has a Forward P/E ratio of 13.63. Its industry sports an average Forward P/E of 15.23, so one might conclude that Lululemon is trading at a discount comparatively.
It is also worth noting that LULU currently has a PEG ratio of 1.67. 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 1.94 at yesterday's closing price.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 191, which puts it in the bottom 23% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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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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