In the latest trading session, Lululemon (LULU) closed at $174.50, marking a +1.14% move from the previous day. The stock's performance was ahead of the S&P 500's daily loss of 0.43%. At the same time, the Dow lost 0.37%, and the tech-heavy Nasdaq lost 0.94%.
The athletic apparel maker's shares have seen a decrease of 16.97% over the last month, not keeping up with the Consumer Discretionary sector's loss of 3.62% and the S&P 500's gain of 0.89%.
Analysts and investors alike will be keeping a close eye on the performance of Lululemon in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $4.74, reflecting a 22.8% decrease from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $3.6 billion, down 0.24% from the year-ago period.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $13.06 per share and a revenue of $11.08 billion, signifying shifts of -10.79% and +4.61%, respectively, from the last year.
Investors might also notice recent changes to analyst estimates for Lululemon. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0% upward. Lululemon is holding a Zacks Rank of #3 (Hold) right now.
In the context of valuation, Lululemon is at present trading with a Forward P/E ratio of 13.21. Its industry sports an average Forward P/E of 16.31, so one might conclude that Lululemon is trading at a discount comparatively.
Investors should also note that LULU has a PEG ratio of 10.65 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Textile - Apparel industry had an average PEG ratio of 2.21 as trading concluded yesterday.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 59, which puts it in the top 25% of all 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.
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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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