Lululemon's Stock Plummets Further Than the Overall Market: Key Takeaways

At the recent market closing, Lululemon’s (LULU) share price stood at $315.75, marking a decline of -1.7% from the prior day. This drop was more significant than the overall losses seen in the S&P 500, which dropped by only 0.56%. Meanwhile, both the Dow Jones Industrial Average and the tech-focused Nasdaq Index experienced decreases of 0.58% and 0.51%, respectively.

The stock price of the company specializing in sportswear surged by 18.41% within the last month, outperforming both the Consumer Discretionary sector’s increase of 10.54% and the S&P 500’s rise of 7.37%.

Investors will keep a close eye on Lululemon’s upcoming earnings report. The company plans to publish its financials on June 5, 2025. Analysts forecast an EPS of $2.58 for this period, marking a rise of approximately 1.57% from the same time frame in the previous year. Additionally, according to recent estimates, revenues are anticipated to reach around $2.36 billion, reflecting a significant increase of about 6.62% over the prior-year quarter.

For the complete fiscal year, Zacks Consensus Estimates forecast earnings of $14.78 per share and revenues totaling $11.19 billion, representing increases of 0.96% and 5.7%, correspondingly, compared to the previous year.

Additionally, it could prove advantageous for investors to keep an eye on any recent changes in analysts' forecasts for Lululemon. Such updates often indicate the most current short-term business developments. Consequently, upward adjustments in these predictions suggest that analysts have become more optimistic about the firm’s operations and financial performance.

Our findings show that these modifications in estimates are closely linked to upcoming stock price performance. Leveraging this insight, we've created the Zacks Rank, our exclusive model that factors in these estimate shifts and offers a practical rating system for investors.

The Zacks ranking system, which spans from #1 (Strong Buy) to #5 (Strong Sell), boasts a notable track record of surpassing external audits, as shares ranked #1 have delivered an average yearly return of +25% since 1988. Over the last thirty days, our aggregated earnings per share forecast has increased by 0.02%. At present, Lululemon holds a Zacks rank of #3 (Hold).

Regarding valuation, Lululemon is presently trading with a Forward P/E ratio of 21.74, indicating a higher value compared to the industry’s average Forward P/E which stands at 15.1.

We can observe that LULU presently boasts a PEG ratio of 2.73. Much like the well-known P/E ratio, this metric is commonly used but includes consideration for the anticipated growth rate in earnings. As of the close of trading yesterday, the average PEG ratio within the Textile - Apparel sector stood at 1.96.

The textile-apparel industry falls under theConsumer Discretionary sector. With a Zacks Industry Rank of 173, this segment places itself within the lowest third among all 250-plus industries.

The Zacks Industry Rank evaluates the performance of various industry sectors by averaging the Zacks Rankings of their constituent stocks. According to our findings, industries ranked in the top 50% tend to perform twice as well compared to those in the lower half.

Remember to use JWTimurnews to monitor all these stock-influencing metrics, along with others, during the upcoming trading sessions.

The article was initially published on Zacks Investment Research (JWTimurnews).