Last Updated: 10 Nov 2024
Executive Summary
Lululemon Athletica Inc. (LULU) is a leading athletic apparel retailer with a strong brand and loyal customer base. The company has been delivering consistent financial performance, with a focus on product innovation and customer experience. Despite a challenging macroeconomic environment, Lululemon continues to demonstrate resilience and growth potential.
Company Overview
Lululemon was founded in 1998 and is headquartered in Vancouver, Canada. The company designs, develops, and distributes athletic apparel and accessories for men and women. Lululemon's products are known for their high quality, innovative designs, and premium pricing. The company operates over 500 stores worldwide and also sells through its e-commerce platform.
Fundamental Analysis
Revenue: Lululemon's revenue has been growing steadily over the past several years. In the most recent quarter, the company reported revenue of $998.9 million, an increase of 7.3% year-over-year.
Earnings: The company's earnings have also been growing consistently. In the most recent quarter, Lululemon reported diluted EPS of $13.02, an increase of 17.5% year-over-year.
Profitability: Lululemon has strong profitability metrics. The company's gross margin is 44.9%, and its operating margin is 22.8%.
Valuation: Lululemon's stock is currently trading at a trailing PE ratio of 24.22. This is above the industry average, but it is justified by the company's strong growth prospects and premium brand.
Technical Analysis
Trend: Lululemon's stock price has been in a downtrend since reaching a 52-week high of $516.39 in November 2021. The stock is currently trading below its 50-day and 200-day moving averages.
Support and Resistance: The stock has support at $277.49, which is the 50-day moving average. The stock has resistance at $317.57, which is the analyst target price.
Momentum: The stock's momentum is currently negative. The MACD indicator is below the signal line, and the RSI indicator is below 50.
Short Term Outlook
In the short term, Lululemon's stock price is likely to remain volatile. The stock is currently trading below its key moving averages and has negative momentum. However, the company's strong fundamentals and analyst support provide some upside potential.
Long Term Outlook
In the long term, Lululemon's stock price is expected to continue to grow. The company has a strong brand, a loyal customer base, and a track record of innovation. Lululemon is well-positioned to benefit from the growing demand for athletic apparel and accessories.
Analyst Recommendations
Analysts are generally bullish on Lululemon's stock. The consensus analyst rating is "Buy." The average analyst target price is $317.57, which represents a potential upside of 2.9% from the current stock price.
