In the latest trading session, Lululemon (LULU) closed at $138.16, marking a -2.97% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.04%. Meanwhile, the Dow experienced a drop of 0.57%, and the technology-dominated Nasdaq saw an increase of 0.04%.
Heading into today, shares of the athletic apparel maker had lost 7% over the past month, lagging the Consumer Discretionary sector's gain of 3.86% and the S&P 500's gain of 12.24%.
Investors will be eagerly watching for 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. Meanwhile, the latest consensus estimate predicts the revenue to be $2.44 billion, indicating a 2.75% increase compared to the same quarter of the previous year.
LULU's full-year Zacks Consensus Estimates are calling for earnings of $12.34 per share and revenue of $11.49 billion. These results would represent year-over-year changes of -6.94% and +3.5%, respectively.
Investors should also take note of any recent adjustments to analyst estimates for Lululemon. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.05% higher within the past month. At present, Lululemon boasts a Zacks Rank of #3 (Hold).
In the context of valuation, Lululemon is at present trading with a Forward P/E ratio of 11.54. This signifies a discount in comparison to the average Forward P/E of 17.53 for its industry.
Meanwhile, LULU's PEG ratio is currently 4.36. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Textile - Apparel industry held an average PEG ratio of 1.94.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 40% 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.
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).