Last Updated: 15 Sep 2024
Executive Summary
Lululemon Athletica Inc. (LULU) is a leading athletic apparel retailer that has consistently outperformed the market in recent years. The company's strong brand, loyal customer base, and innovative product offerings have driven its success. LULU is currently trading at $266.76, below its 52-week high of $516.39. Despite the recent pullback, analysts remain bullish on the stock, with a consensus target price of $315.64.
Company Overview
Lululemon was founded in 1998 and is headquartered in Vancouver, Canada. The company designs, develops, and sells athletic apparel, accessories, and footwear for women and men. LULU has over 500 stores in North America, Europe, and Asia. The company also sells its products online and through wholesale partners.
Fundamental Analysis
LULU's financial performance has been strong in recent years. The company's revenue has grown at a compound annual growth rate (CAGR) of 15% over the past five years. In fiscal 2023, LULU reported revenue of $9.99 billion, up 7% year-over-year. The company's net income grew by 18% to $1.6 billion.
LULU's gross margin is 57%, which is higher than the industry average. The company's operating margin is 23%, which is also higher than the industry average. LULU's return on assets (ROA) is 23%, and its return on equity (ROE) is 43%.
Technical Analysis
LULU's stock price has been in a downtrend since November 2021. The stock has broken below its 50-day and 200-day moving averages. The relative strength index (RSI) is below 50, which indicates that the stock is oversold.
Short Term Outlook
In the short term, LULU's stock price is likely to remain volatile. The stock could continue to trade sideways or move lower. However, the company's strong fundamentals and positive analyst sentiment suggest that the stock is likely to rebound in the long term.
Long Term Outlook
In the long term, LULU's stock price is expected to continue to grow. The company's strong brand, loyal customer base, and innovative product offerings are expected to drive continued growth in revenue and earnings. LULU is also expected to benefit from the growing athleisure trend.
Analyst Recommendations
Analysts are bullish on LULU's stock. The consensus target price is $315.64, which represents a potential upside of 18% from the current price. Eleven analysts have a "Strong Buy" rating on the stock, 11 have a "Buy" rating, 10 have a "Hold" rating, 2 have a "Sell" rating, and 1 has a "Strong Sell" rating.
