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

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Lululemon (LULU - Free Report) closed at $454.41 in the latest trading session, marking a -1.91% move from the prior day. This move lagged the S&P 500's daily loss of 1.9%. Elsewhere, the Dow lost 1.86%, while the tech-heavy Nasdaq added 0.31%.

Prior to today's trading, shares of the athletic apparel maker had gained 0.95% over the past month. This has outpaced the Consumer Discretionary sector's loss of 3.84% and lagged the S&P 500's gain of 1.2% in that time.

Lululemon will be looking to display strength as it nears its next earnings release, which is expected to be December 9, 2021. In that report, analysts expect Lululemon to post earnings of $1.39 per share. This would mark year-over-year growth of 19.83%. Our most recent consensus estimate is calling for quarterly revenue of $1.43 billion, up 28.05% from the year-ago period.

LULU's full-year Zacks Consensus Estimates are calling for earnings of $7.51 per share and revenue of $6.26 billion. These results would represent year-over-year changes of +59.79% and +42.19%, respectively.

Investors should also note any recent changes to analyst estimates for Lululemon. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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 0.14% higher. Lululemon is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, Lululemon is holding a Forward P/E ratio of 61.68. This valuation marks a premium compared to its industry's average Forward P/E of 16.26.

Investors should also note that LULU has a PEG ratio of 3.08 right now. 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. The Textile - Apparel industry currently had an average PEG ratio of 1.06 as of yesterday's close.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 39, putting it in the top 16% 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.

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