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

In the latest trading session, Lululemon (LULU) closed at $416.64, marking a -0.18% move from the previous day. This move lagged the S&P 500's daily gain of 0.74%.

Heading into today, shares of the athletic apparel maker had lost 0.51% over the past month, outpacing the Consumer Discretionary sector's loss of 2.25% and lagging the S&P 500's gain of 1.34% in that time.

Investors will be hoping for strength from LULU as it approaches its next earnings release. The company is expected to report EPS of $1.38, up 18.97% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.43 billion, up 27.95% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.50 per share and revenue of $6.26 billion. These totals would mark changes of +59.57% and +42.16%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for LULU. These revisions help to show the ever-changing nature of near-term business trends. 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. 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, 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 0.04% higher. LULU is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that LULU has a Forward P/E ratio of 55.66 right now. For comparison, its industry has an average Forward P/E of 16.86, which means LULU is trading at a premium to the group.

It is also worth noting that LULU currently has a PEG ratio of 2.78. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Textile - Apparel stocks are, on average, holding a PEG ratio of 0.79 based on yesterday's closing prices.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 27, putting it in the top 11% 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.

To follow LULU in the coming trading sessions, be sure to utilize Zacks.com.

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