Lululemon (LULU) closed the most recent trading day at $130.21, moving -2.52% from the previous trading session. This change lagged the S&P 500's daily gain of 0.81%. Meanwhile, the Dow experienced a rise of 0.73%, and the technology-dominated Nasdaq saw an increase of 1.03%.
Heading into today, shares of the athletic apparel maker had lost 17.42% over the past month, lagging the Consumer Discretionary sector's loss of 0.86% and the S&P 500's gain of 9.47%.
Analysts and investors alike will be keeping a close eye on the performance of Lululemon in its upcoming earnings disclosure. In that report, analysts expect Lululemon to post earnings of $1.69 per share. This would mark a year-over-year decline of 35%. Our most recent consensus estimate is calling for quarterly revenue of $2.44 billion, up 2.75% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $12.34 per share and revenue of $11.49 billion, which would represent changes of -6.94% and +3.5%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Lululemon. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.05% higher within the past month. Currently, Lululemon is carrying a Zacks Rank of #3 (Hold).
From a valuation perspective, Lululemon is currently exchanging hands at a Forward P/E ratio of 10.45. For comparison, its industry has an average Forward P/E of 16.27, which means Lululemon is trading at a discount to the group.
One should further note that LULU currently holds a PEG ratio of 3.95. 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 average PEG ratio for the Textile - Apparel industry stood at 1.92 at the close of the market yesterday.
The Textile - Apparel industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 64, positioning it in the top 27% of all 250+ industries.
The Zacks Industry Rank is ordered 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.
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).