Lululemon (LULU) closed the most recent trading day at $354.87, moving +1.65% from the previous trading session. This change outpaced the S&P 500’s 0.27% gain on the day. Elsewhere, the Dow lost 0.31%, while the tech-heavy Nasdaq added 1%.
Prior to today’s trading, shares of the athletic apparel maker had gained 11.51% over the past month. This has outpaced the Consumer Discretionary sector’s gain of 6.76% and the S&P 500’s gain of 5.63% in that time.
LULU will be looking to display strength as it nears its next earnings release. On that day, LULU is projected to report earnings of $0.50 per share, which would represent a year-over-year decline of 47.92%. Our most recent consensus estimate is calling for quarterly revenue of $828.11 million, down 6.25% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.38 per share and revenue of $4.05 billion, which would represent changes of -11.16% and +1.65%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for LULU. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.31% higher. LULU is currently a Zacks Rank #3 (Hold).
In terms of valuation, LULU is currently trading at a Forward P/E ratio of 79.72. Its industry sports an average Forward P/E of 37.7, so we one might conclude that LULU is trading at a premium comparatively.
We can also see that LULU currently has a PEG ratio of 4.35. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. Textile – Apparel stocks are, on average, holding a PEG ratio of 4.68 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 214, putting it in the bottom 16% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.