Lululemon (LULU) Outperforms Broader Market: What You Need to Know

Lululemon (LULU) closed at $119.26 in the latest trading session, marking a +2.36% move from the prior day. This change outpaced the S&P 500's 0.42% gain on the day. Elsewhere, the Dow saw an upswing of 0.29%, while the tech-heavy Nasdaq appreciated by 0.29%.

Prior to today's trading, shares of the athletic apparel maker had lost 4.37% lagged the Consumer Discretionary sector's gain of 0.02% and the S&P 500's gain of 2.2%.

Investors will be eagerly watching for the performance of Lululemon in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $1.79, marking a 42.26% fall compared to the same quarter of the previous 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 annual period, the Zacks Consensus Estimates anticipate earnings of $11.08 per share and a revenue of $11.08 billion, signifying shifts of -16.44% and -0.22%, respectively, from the last year.

Any recent changes to analyst estimates for Lululemon should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.51% lower. 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 10.52. This expresses a discount compared to the average Forward P/E of 15.73 of its industry.

Also, we should mention that LULU has a PEG ratio of 3.77. 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 2.14 at the close of the market yesterday.

The Textile - Apparel industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 191, placing it within the bottom 23% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research