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Lululemon (LULU) Suffers a Larger Drop Than the General Market: Key Insights

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In the latest market close, Lululemon (LULU - Free Report) reached $315.75, with a -1.7% movement compared to the previous day. The stock fell short of the S&P 500, which registered a loss of 0.56% for the day. On the other hand, the Dow registered a loss of 0.58%, and the technology-centric Nasdaq decreased by 0.51%.

Shares of the athletic apparel maker witnessed a gain of 18.41% over the previous month, beating the performance of the Consumer Discretionary sector with its gain of 10.54% and the S&P 500's gain of 7.37%.

The investment community will be closely monitoring the performance of Lululemon in its forthcoming earnings report. The company is scheduled to release its earnings on June 5, 2025. The company is predicted to post an EPS of $2.58, indicating a 1.57% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $2.36 billion, showing a 6.62% escalation compared to the year-ago quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $14.78 per share and a revenue of $11.19 billion, indicating changes of +0.96% and +5.7%, respectively, from the former year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Lululemon. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.02% higher. Lululemon is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Lululemon is currently trading at a Forward P/E ratio of 21.74. This denotes a premium relative to the industry's average Forward P/E of 15.1.

We can also see that LULU currently has a PEG ratio of 2.73. 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. By the end of yesterday's trading, the Textile - Apparel industry had an average PEG ratio of 1.96.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 173, putting it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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