In the latest trading session, Lululemon (LULU) closed at $366.72, marking a -0.41% move from the previous day. The stock exceeded the S&P 500, which registered a loss of 0.47% for the day. Meanwhile, the Dow gained 0.37%, and the Nasdaq, a tech-heavy index, lost 1.35%.
Coming into today, shares of the athletic apparel maker had lost 8.61% in the past month. In that same time, the Consumer Discretionary sector gained 1.44%, while the S&P 500 lost 1.78%.
Market participants will be closely following the financial results of Lululemon in its upcoming release. The company is predicted to post an EPS of $5.83, indicating a 10.21% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $3.57 billion, indicating a 11.5% increase compared to the same quarter of the previous year.
Investors should also take note of any recent adjustments to analyst estimates for Lululemon. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.21% higher. Right now, Lululemon possesses a Zacks Rank of #2 (Buy).
In terms of valuation, Lululemon is currently trading at a Forward P/E ratio of 23.95. Its industry sports an average Forward P/E of 15.94, so one might conclude that Lululemon is trading at a premium comparatively.
Meanwhile, LULU's PEG ratio is currently 2.24. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Textile - Apparel industry stood at 1.75 at the close of the market yesterday.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 36, putting it in the top 15% 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.
To follow LULU in the coming trading sessions, be sure to utilize Zacks.com.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
