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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 $370.22, marking a +1.32% move from the previous day. This move outpaced the S&P 500's daily loss of 0.46%. Meanwhile, the Dow lost 0.91%, and the Nasdaq, a tech-heavy index, lost 0.06%.

Coming into today, shares of the athletic apparel maker had gained 10.67% in the past month. In that same time, the Consumer Discretionary sector gained 13.2%, while the S&P 500 gained 7.53%.

Wall Street will be looking for positivity from LULU as it approaches its next earnings report date. This is expected to be December 10, 2020. In that report, analysts expect LULU to post earnings of $0.85 per share. This would mark a year-over-year decline of 11.46%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.01 billion, up 10.19% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.16 per share and revenue of $4.14 billion. These totals would mark changes of -15.62% and +4.05%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for LULU. 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 shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 2.19% lower. LULU currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, LULU is holding a Forward P/E ratio of 87.87. Its industry sports an average Forward P/E of 29.14, so we one might conclude that LULU is trading at a premium comparatively.

Also, we should mention that LULU has a PEG ratio of 4.39. 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. Textile - Apparel stocks are, on average, holding a PEG ratio of 5.89 based on yesterday's closing prices.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 50, putting it in the top 20% 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.


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