Lululemon (LULU) closed the most recent trading day at $126.34, moving -3.69% from the previous trading session. The stock's performance was behind the S&P 500's daily gain of 0.19%. Meanwhile, the Dow experienced a rise of 0.19%, and the technology-dominated Nasdaq saw an increase of 0.1%.
Prior to today's trading, shares of the athletic apparel maker had lost 19.94% lagged the Consumer Discretionary sector's loss of 1.99% and the S&P 500's gain of 9.13%.
Analysts and investors alike will be keeping a close eye on the performance of Lululemon in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.69, indicating a 35% decline compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $2.44 billion, indicating a 2.75% upward movement from the same quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.33 per share and revenue of $11.49 billion, indicating changes of -7.01% and +3.46%, respectively, compared to the previous year.
Investors should also note any recent changes to analyst estimates for Lululemon. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 0.03% lower within the past month. At present, Lululemon boasts a Zacks Rank of #3 (Hold).
From a valuation perspective, Lululemon is currently exchanging hands at a Forward P/E ratio of 10.64. This expresses a discount compared to the average Forward P/E of 16.7 of its industry.
We can also see that LULU currently has a PEG ratio of 4.02. 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 1.99 as of yesterday's close.
The Textile - Apparel industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 71, positioning it in the top 30% 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.
To follow LULU in the coming trading sessions, be sure to utilize Zacks.com.
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lululemon athletica inc. (LULU): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).