Lululemon (LULU) Outperforms Broader Market: What You Need to Know

Lululemon (LULU) closed at $428.58 in the latest trading session, marking a +1.45% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.74%. Meanwhile, the Dow gained 0.58%, and the Nasdaq, a tech-heavy index, added 1.13%.

Market participants will be closely following the financial results of Lululemon in its upcoming release. The company is predicted to post an EPS of $2.27, indicating a 13.5% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $2.19 billion, showing a 17.84% escalation compared to the year-ago quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $12.13 per share and a revenue of $9.58 billion, indicating changes of +20.46% and +18.08%, respectively, from the former year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Lululemon. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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, 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. Within the past 30 days, our consensus EPS projection has moved 0.01% lower. Lululemon is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Lululemon is presently being traded at a Forward P/E ratio of 34.84. This signifies a premium in comparison to the average Forward P/E of 15.59 for its industry.

We can additionally observe that LULU currently boasts a PEG ratio of 1.88. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Textile - Apparel was holding an average PEG ratio of 1.64 at yesterday's closing price.

The Textile - Apparel industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 87, this industry ranks in the top 35% of all industries, numbering over 250.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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.

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

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