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Lululemon (LULU) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Lululemon (LULU) closed the most recent trading day at $148.12, moving +0.37% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.18%. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.03%.

Coming into today, shares of the athletic apparel maker had lost 1.27% in the past month. In that same time, the Consumer Discretionary sector gained 4.76%, while the S&P 500 gained 4.28%.

Wall Street will be looking for positivity from LULU as it approaches its next earnings report date. In that report, analysts expect LULU to post earnings of $1.74 per share. This would mark year-over-year growth of 30.83%. Meanwhile, our latest consensus estimate is calling for revenue of $1.15 billion, up 23.7% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for LULU. 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.

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Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.56% higher. LULU is currently a Zacks Rank #2 (Buy).

Digging into valuation, LULU currently has a Forward P/E ratio of 33.54. Its industry sports an average Forward P/E of 15.19, so we one might conclude that LULU is trading at a premium comparatively.

It is also worth noting that LULU currently has a PEG ratio of 1.74. 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. Textile - Apparel stocks are, on average, holding a PEG ratio of 1.37 based on yesterday's closing prices.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 23, which puts it in the top 10% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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