Markets

Lululemon (LULU) Outpaces Stock Market Gains: What You Should Know

In the latest trading session, Lululemon (LULU) closed at $218.46, marking a +1.18% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.05%. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.11%.

Coming into today, shares of the athletic apparel maker had gained 5.34% in the past month. In that same time, the Consumer Discretionary sector gained 3.92%, while the S&P 500 gained 4.32%.

Wall Street will be looking for positivity from LULU as it approaches its next earnings report date. On that day, LULU is projected to report earnings of $0.93 per share, which would represent year-over-year growth of 24%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $896.50 million, up 19.91% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.74 per share and revenue of $3.86 billion. These totals would mark changes of +23.44% and +17.45%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for LULU. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. LULU currently has a Zacks Rank of #3 (Hold).

In terms of valuation, LULU is currently trading at a Forward P/E ratio of 45.54. This valuation marks a premium compared to its industry's average Forward P/E of 15.11.

It is also worth noting that LULU currently has a PEG ratio of 2.51. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. LULU's industry had an average PEG ratio of 2.2 as of yesterday's close.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 97, which puts it in the top 39% 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.

To follow LULU in the coming trading sessions, be sure to utilize Zacks.com.


Click to get this free report

lululemon athletica inc. (LULU): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.