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Lululemon (LULU) Gains As Market Dips: What You Should Know
In the latest trading session, Lululemon (LULU - Free Report) closed at $363.28, marking a +0.59% move from the previous day. This change outpaced the S&P 500's 1.54% loss on the day. Meanwhile, the Dow lost 1.45%, and the Nasdaq, a tech-heavy index, lost 0.16%.
Heading into today, shares of the athletic apparel maker had gained 9.95% over the past month, outpacing the Consumer Discretionary sector's gain of 6.36% and the S&P 500's gain of 4.54% in that time.
Wall Street will be looking for positivity from Lululemon as it approaches its next earnings report date. This is expected to be December 8, 2022. On that day, Lululemon is projected to report earnings of $1.95 per share, which would represent year-over-year growth of 20.37%. Our most recent consensus estimate is calling for quarterly revenue of $1.8 billion, up 24.44% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.89 per share and revenue of $7.93 billion. These totals would mark changes of +26.96% and +26.74%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Lululemon. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
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. The Zacks Consensus EPS estimate remained stagnant within the past month. Lululemon is holding a Zacks Rank of #2 (Buy) right now.
In terms of valuation, Lululemon is currently trading at a Forward P/E ratio of 36.53. For comparison, its industry has an average Forward P/E of 11.44, which means Lululemon is trading at a premium to the group.
Also, we should mention that LULU has a PEG ratio of 1.83. 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 1.64 as of yesterday's close.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 175, putting it in the bottom 31% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.