In the latest trading session, Lululemon (LULU) closed at $164.16, marking a -3.82% move from the previous day. The stock fell short of the S&P 500, which registered a loss of 0.92% for the day. Meanwhile, the Dow lost 1.18%, and the Nasdaq, a tech-heavy index, lost 0.84%.
The stock of athletic apparel maker has risen by 1.95% in the past month, leading the Consumer Discretionary sector's loss of 4.28% and the S&P 500's gain of 1.48%.
Market participants will be closely following the financial results of Lululemon in its upcoming release. The company's upcoming EPS is projected at $2.22, signifying a 22.65% drop compared to the same quarter of the previous 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.
For the full year, the Zacks Consensus Estimates are projecting earnings of $12.91 per share and revenue of $10.98 billion, which would represent changes of -11.82% and +3.72%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Lululemon. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% higher. At present, Lululemon boasts a Zacks Rank of #3 (Hold).
In the context of valuation, Lululemon is at present trading with a Forward P/E ratio of 13.23. This indicates a discount in contrast to its industry's Forward P/E of 16.47.
Meanwhile, LULU's PEG ratio is currently 10.67. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Textile - Apparel industry had an average PEG ratio of 2.18 as trading concluded yesterday.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 71, putting it in the top 29% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within 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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