Lululemon (LULU) Outpaces Stock Market Gains: What You Should Know
In the latest trading session, Lululemon (LULU) closed at $298.81, marking a +1.83% move from the previous day. This change outpaced the S&P 500's 1.3% gain on the day. At the same time, the Dow added 0.98%, and the tech-heavy Nasdaq gained 7.48%.
Coming into today, shares of the athletic apparel maker had lost 8.4% in the past month. In that same time, the Consumer Discretionary sector lost 7.25%, while the S&P 500 lost 2.95%.
Lululemon will be looking to display strength as it nears its next earnings release, which is expected to be March 28, 2023. The company is expected to report EPS of $4.25, up 26.11% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $2.69 billion, up 26.43% from the year-ago period.
It is also important to note the recent changes to analyst estimates for Lululemon. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Lululemon is currently a Zacks Rank #3 (Hold).
In terms of valuation, Lululemon is currently trading at a Forward P/E ratio of 25.87. This represents a premium compared to its industry's average Forward P/E of 10.6.
Also, we should mention that LULU has a PEG ratio of 1.29. 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. The Textile - Apparel industry currently had an average PEG ratio of 1.26 as of yesterday's close.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 180, which puts it in the bottom 29% 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.
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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