Lululemon (LULU) closed at $170.86 in the latest trading session, marking a +2.85% move from the prior day. The stock's change was more than the S&P 500's daily gain of 1.54%. On the other hand, the Dow registered a gain of 0.81%, and the technology-centric Nasdaq increased by 2.27%.
The athletic apparel maker's stock has dropped by 0.82% in the past month, exceeding the Consumer Discretionary sector's loss of 4.98% and lagging the S&P 500's gain of 0.29%.
Analysts and investors alike will be keeping a close eye on the performance of Lululemon in its upcoming earnings disclosure. The company is forecasted to report an EPS of $2.22, showcasing a 22.65% downward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $2.49 billion, reflecting a 3.78% rise from the equivalent quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $12.91 per share and revenue of $10.98 billion. These totals would mark changes of -11.82% and +7.86%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Lululemon. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection has moved 0.03% higher. 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 12.87. For comparison, its industry has an average Forward P/E of 15.85, which means Lululemon is trading at a discount to the group.
Investors should also note that LULU has a PEG ratio of 10.38 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Textile - Apparel industry had an average PEG ratio of 2.3 as trading concluded yesterday.
The Textile - Apparel industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 87, placing it within the top 36% of over 250 industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. 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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lululemon athletica inc. (LULU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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