The most recent trading session ended with Lululemon (LULU) standing at $367.22, reflecting a -1.4% shift from the previouse trading day's closing. This change lagged the S&P 500's daily gain of 0.24%. Meanwhile, the Dow experienced a rise of 0.16%, and the technology-dominated Nasdaq saw an increase of 0.08%.
The athletic apparel maker's shares have seen a decrease of 0.1% over the last month, not keeping up with the Consumer Discretionary sector's gain of 8.73% and the S&P 500's gain of 2.37%.
Market participants will be closely following the financial results of Lululemon in its upcoming release. The company is expected to report EPS of $5.83, up 10.21% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.57 billion, up 11.5% from the prior-year quarter.
It is also important to note the recent changes to analyst estimates for Lululemon. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.54% upward. Lululemon currently has a Zacks Rank of #2 (Buy).
In the context of valuation, Lululemon is at present trading with a Forward P/E ratio of 24.22. This represents a premium compared to its industry's average Forward P/E of 15.63.
Investors should also note that LULU has a PEG ratio of 2.26 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. By the end of yesterday's trading, the Textile - Apparel industry had an average PEG ratio of 1.84.
The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry, currently bearing a Zacks Industry Rank of 37, finds itself in the top 15% echelons of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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