Lululemon (LULU) closed at $126.76 in the latest trading session, marking a +1.25% move from the prior day. The stock outpaced the S&P 500’s daily gain of 0.17%. Elsewhere, the Dow gained 0.55%, while the tech-heavy Nasdaq added 0.09%.
Prior to today’s trading, shares of the athletic apparel maker had lost 23.41% lagged the Consumer Discretionary sector’s loss of 5.96% and the S&P 500’s gain of 4.59%.
Analysts and investors alike will be keeping a close eye on the performance of Lululemon in its upcoming earnings disclosure. The company’s earnings per share (EPS) are projected to be $1.69, reflecting a 35% decrease from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $2.44 billion, indicating a 2.75% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $12.33 per share and a revenue of $11.49 billion, demonstrating changes of -7.01% and +3.46%, respectively, from the preceding year.
It is also important to note the recent changes to analyst estimates for Lululemon. 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 business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we’ve established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.03% decrease. As of now, Lululemon holds a Zacks Rank of #3 (Hold).
From a valuation perspective, Lululemon is currently exchanging hands at a Forward P/E ratio of 10.15. For comparison, its industry has an average Forward P/E of 15.1, which means Lululemon is trading at a discount to the group.
Also, we should mention that LULU has a PEG ratio of 3.84. 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. As of the close of trade yesterday, the Textile – Apparel industry held an average PEG ratio of 1.7.
The Textile – Apparel industry is part of the Consumer Discretionary sector. This industry, currently bearing a Zacks Industry Rank of 94, finds itself in the top 39% echelons of all 250+ industries.
