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

Lululemon (LULU) closed the most recent trading day at $328.21, moving -0.12% from the previous trading session. This change lagged the S&P 500's daily gain of 0.36%. Elsewhere, the Dow gained 0.62%, while the tech-heavy Nasdaq added 0.35%.

Investors will be hoping for strength from LULU as it approaches its next earnings release. The company is expected to report EPS of $0.49, down 48.96% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $821.74 million, down 6.98% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.37 per share and revenue of $4.04 billion. These totals would mark changes of -11.36% and +1.43%, 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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 past month, the Zacks Consensus EPS estimate remained stagnant. LULU is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that LULU has a Forward P/E ratio of 75.26 right now. This valuation marks a premium compared to its industry's average Forward P/E of 35.18.

We can also see that LULU currently has a PEG ratio of 4.11. 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. The Textile - Apparel was holding an average PEG ratio of 4.11 at yesterday's closing price.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 219, putting it in the bottom 14% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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