In the latest trading session, Lululemon (LULU) closed at $182.13, marking a +2.48% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.56%. Elsewhere, the Dow gained 0.26%, while the tech-heavy Nasdaq added 0.78%.
The athletic apparel maker's shares have seen a decrease of 5.85% over the last month, not keeping up with the Consumer Discretionary sector's loss of 2.26% and the S&P 500's loss of 1.27%.
The upcoming earnings release of Lululemon will be of great interest to investors. On that day, Lululemon is projected to report earnings of $4.75 per share, which would represent a year-over-year decline of 22.64%. In the meantime, our current consensus estimate forecasts the revenue to be $3.6 billion, indicating a 0.22% decline compared to the corresponding quarter of the prior year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $13.06 per share and revenue of $11.08 billion. These totals would mark changes of -10.79% and +4.61%, respectively, from last year.
Investors should also pay attention to any latest changes in analyst estimates for Lululemon. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.14% lower. Lululemon presently features a Zacks Rank of #3 (Hold).
In the context of valuation, Lululemon is at present trading with a Forward P/E ratio of 13.88. For comparison, its industry has an average Forward P/E of 19.43, which means Lululemon is trading at a discount to the group.
Investors should also note that LULU has a PEG ratio of 11.19 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Textile - Apparel stocks are, on average, holding a PEG ratio of 2.22 based on yesterday's closing prices.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 57, which puts it in the top 24% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming 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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