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

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Lululemon (LULU) closed at $260.66 in the latest trading session, marking a +1.22% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.95%. At the same time, the Dow added 0.6%, and the tech-heavy Nasdaq gained 0.04%.

Prior to today's trading, shares of the athletic apparel maker had lost 26.95% over the past month. This has lagged the Consumer Discretionary sector's loss of 11.14% and the S&P 500's loss of 7.49% in that time.

Wall Street will be looking for positivity from Lululemon as it approaches its next earnings report date. This is expected to be June 2, 2022. The company is expected to report EPS of $1.43, up 23.28% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.55 billion, up 26.06% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.34 per share and revenue of $7.59 billion. These totals would mark changes of +19.9% and +21.33%, respectively, from last 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 company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 0.21% higher. Lululemon currently has a Zacks Rank of #2 (Buy).

Investors should also note Lululemon's current valuation metrics, including its Forward P/E ratio of 27.58. For comparison, its industry has an average Forward P/E of 10.2, which means Lululemon is trading at a premium to the group.

Meanwhile, LULU's PEG ratio is currently 1.38. 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. Textile - Apparel stocks are, on average, holding a PEG ratio of 1.13 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 162, putting it in the bottom 36% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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