Lululemon (LULU) closed the most recent trading day at $163.86, moving -1.59% from the previous trading session. This change lagged the S&P 500's 0.11% loss on the day. At the same time, the Dow lost 0.56%, and the tech-heavy Nasdaq gained 0.35%.
Heading into today, shares of the athletic apparel maker had gained 5.26% over the past month, outpacing the Consumer Discretionary sector's loss of 1.21% and the S&P 500's gain of 0.51%.
Market participants will be closely following the financial results of Lululemon in its upcoming release. The company is expected to report EPS of $1.69, down 35% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $2.43 billion, indicating a 2.69% growth compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates project earnings of $12.34 per share and a revenue of $11.5 billion, demonstrating changes of -6.94% and +3.54%, respectively, from the preceding year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Lululemon. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the 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 has moved 3.69% lower within the past month. At present, Lululemon boasts a Zacks Rank of #3 (Hold).
Digging into valuation, Lululemon currently has a Forward P/E ratio of 13.49. This denotes a discount relative to the industry average Forward P/E of 17.29.
It is also worth noting that LULU currently has a PEG ratio of 5.1. 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 1.94 based on yesterday's closing prices.
The Textile - Apparel industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 96, placing it within the top 40% of over 250 industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).