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Lululemon (LULU) Dips More Than Broader Markets: What You Should Know

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Lululemon (LULU - Free Report) closed the most recent trading day at $391.43, moving -1.01% from the previous trading session. This change lagged the S&P 500's daily loss of 0.47%.

Prior to today's trading, shares of the athletic apparel maker had gained 8.7% over the past month. This has outpaced the Consumer Discretionary sector's loss of 4.3% and the S&P 500's gain of 3.38% in that time.

Wall Street will be looking for positivity from LULU as it approaches its next earnings report date. The company is expected to report EPS of $1.18, up 59.46% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.32 billion, up 46.63% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.03 per share and revenue of $5.94 billion, which would represent changes of +49.57% and +34.9%, respectively, from the prior year.

Investors might also notice 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. 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 0.97% higher. LULU is currently sporting a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that LULU has a Forward P/E ratio of 56.27 right now. Its industry sports an average Forward P/E of 18.84, so we one might conclude that LULU is trading at a premium comparatively.

We can also see that LULU currently has a PEG ratio of 3.07. 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 1.26 as of yesterday's close.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 29, putting it in the top 12% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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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