In the latest close session, Lululemon (LULU) was down 4.85% at $99.01. The stock fell short of the S&P 500, which registered a loss of 0.52% for the day. At the same time, the Dow lost 1.24%, and the tech-heavy Nasdaq lost 0.21%.
Prior to today's trading, shares of the athletic apparel maker had gained 2.38% lagged the Consumer Discretionary sector's gain of 4.8% and outpaced the S&P 500's loss of 1.21%.
Analysts and investors alike will be keeping a close eye on the performance of Lululemon in its upcoming earnings disclosure. On that day, Lululemon is projected to report earnings of $0.97 per share, which would represent a year-over-year decline of 62.55%. Alongside, our most recent consensus estimate is anticipating revenue of $2.31 billion, indicating a 10.02% downward movement from the same quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $9.55 per share and revenue of $10.5 billion. These totals would mark changes of -27.98% and -5.46%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Lululemon. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 remained stagnant. Currently, Lululemon is carrying a Zacks Rank of #5 (Strong Sell).
From a valuation perspective, Lululemon is currently exchanging hands at a Forward P/E ratio of 10.89. This expresses a discount compared to the average Forward P/E of 16.76 of its industry.
It is also worth noting that LULU currently has a PEG ratio of 2.48. 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 average PEG ratio for the Textile - Apparel industry stood at 1.94 at the close of the market yesterday.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 184, putting it in the bottom 26% 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.
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).