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Lululemon (LULU) Gains As Market Dips: What You Should Know

The most recent trading session ended with Lululemon (LULU) standing at $344.86, reflecting a +1.73% shift from the previouse trading day's closing. The stock outpaced the S&P 500's daily loss of 0.58%. Meanwhile, the Dow experienced a drop of 0.12%, and the technology-dominated Nasdaq saw a decrease of 1.15%.

Heading into today, shares of the athletic apparel maker had lost 27.46% over the past month, lagging the Consumer Discretionary sector's loss of 4.55% and the S&P 500's loss of 1.09% in that time.

Market participants will be closely following the financial results of Lululemon in its upcoming release. On that day, Lululemon is projected to report earnings of $2.39 per share, which would represent year-over-year growth of 4.82%. In the meantime, our current consensus estimate forecasts the revenue to be $2.2 billion, indicating a 9.93% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $14.15 per share and a revenue of $10.76 billion, representing changes of +10.81% and +11.88%, respectively, from the prior year.

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Any recent changes to analyst estimates for Lululemon should also be noted by investors. 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 demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 1.44% downward. As of now, Lululemon holds a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Lululemon has a Forward P/E ratio of 23.95 right now. This indicates a premium in contrast to its industry's Forward P/E of 11.19.

It is also worth noting that LULU currently has a PEG ratio of 1.2. 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 1.4 as of yesterday's close.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 206, putting it in the bottom 19% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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lululemon athletica inc. (LULU) : Free Stock Analysis Report

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