In the latest close session, Lululemon (LULU) was up +1.17% at $118.79. The stock outperformed the S&P 500, which registered a daily loss of 0.51%. Meanwhile, the Dow lost 0.2%, and the Nasdaq, a tech-heavy index, lost 1.47%.
Prior to today's trading, shares of the athletic apparel maker had gained 5.06% outpaced the Consumer Discretionary sector's loss of 0.58% and the S&P 500's gain of 0.53%.
Market participants will be closely following the financial results of Lululemon in its upcoming release. The company is forecasted to report an EPS of $1.79, showcasing a 42.26% downward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $2.47 billion, reflecting a 2.26% fall from the equivalent quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $11.08 per share and a revenue of $11.08 billion, demonstrating changes of -16.44% and -0.22%, respectively, from the preceding year.
Investors should also take note of any recent adjustments to analyst estimates for Lululemon. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
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. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.54% lower. Lululemon is currently sporting a Zacks Rank of #5 (Strong Sell).
Investors should also note Lululemon's current valuation metrics, including its Forward P/E ratio of 10.6. For comparison, its industry has an average Forward P/E of 16, which means Lululemon is trading at a discount to the group.
It's also important to note that LULU currently trades at a PEG ratio of 3.8. 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. The Textile - Apparel industry had an average PEG ratio of 2.24 as trading concluded yesterday.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 189, putting it in the bottom 24% 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.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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lululemon athletica inc. (LULU): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).