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

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In the latest trading session, Lululemon (LULU - Free Report) closed at $140.13, marking a +1.03% move from the previous day. This change outpaced the S&P 500's 0.76% loss on the day. Meanwhile, the Dow lost 0.82%, and the Nasdaq, a tech-heavy index, lost 0.9%.

Heading into today, shares of the athletic apparel maker had lost 5.54% over the past month, lagging the Consumer Discretionary sector's loss of 2.26% and the S&P 500's loss of 1.41% in that time.

Investors will be hoping for strength from LULU as it approaches its next earnings release, which is expected to be December 5, 2018. On that day, LULU is projected to report earnings of $0.69 per share, which would represent year-over-year growth of 23.21%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $733.09 million, up 18.43% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.58 per share and revenue of $3.23 billion. These totals would mark changes of +38.22% and +21.82%, respectively, from last year.

It is also important to note the 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.15% higher. LULU currently has a Zacks Rank of #1 (Strong Buy).

Investors should also note LULU's current valuation metrics, including its Forward P/E ratio of 38.72. This valuation marks a premium compared to its industry's average Forward P/E of 17.9.

It is also worth noting that LULU currently has a PEG ratio of 2.01. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LULU's industry had an average PEG ratio of 1.51 as of yesterday's close.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 34, putting it in the top 13% 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.

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


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