Lululemon (LULU) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3-min read

Lululemon (LULU) closed at $325.50 in the latest trading session, marking a -1.38% move from the prior day. This change lagged the S&P 500's 0.22% loss on the day. At the same time, the Dow lost 0.35%, and the tech-heavy Nasdaq lost 0.28%.

Heading into today, shares of the athletic apparel maker had gained 5.24% over the past month, outpacing the Consumer Discretionary sector's gain of 1.59% and the S&P 500's gain of 3.82% in that time.

Investors will be hoping for strength from LULU as it approaches its next earnings release. In that report, analysts expect LULU to post earnings of $0.84 per share. This would mark a year-over-year decline of 12.5%. Meanwhile, our latest consensus estimate is calling for revenue of $1.01 billion, up 9.8% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.25 per share and revenue of $4.22 billion, which would represent changes of -13.79% and +6%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for LULU. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 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. Over the past month, the Zacks Consensus EPS estimate has moved 3.78% lower. LULU is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, LULU is holding a Forward P/E ratio of 77.7. This valuation marks a premium compared to its industry's average Forward P/E of 44.29.

Investors should also note that LULU has a PEG ratio of 3.89 right now. 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. The Textile - Apparel was holding an average PEG ratio of 6 at yesterday's closing price.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 31, which puts it in the top 13% 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.

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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