Stock Price & Analysis

Based on the provided data and current market conditions, here's a comprehensive analysis of LULU stock:

Technical Analysis

The stock is showing bearish signals in the short term:

• RSI-14 at 32.61 indicates approaching oversold territory
• MACD is negative at -5.84 with bearish divergence
• Stock is trading below its 5-day (366.23) and 10-day (381.26) moving averages
• Currently near the lower Bollinger Band (339.41), suggesting potential oversold conditions

Fundamental Strength

The company demonstrates solid fundamentals:

• Revenue growth of 26% year-over-year to $9.62 billion
• Healthy gross margin of 58.26%
• Strong ROE of 42.01%
• Low debt-to-equity ratio of 0.26%
• Current ratio of 2.49 indicating good liquidity

Valuation Metrics

The stock appears relatively expensive:

• P/E ratio: 39.18x
• EV/EBITDA: 22.46x
• P/S ratio: 6.31x
• P/B ratio: 14.84x

Recent Developments According to recent reports, Lululemon has significant growth potential:

• Strong international expansion opportunities, particularly in China
• Men's segment growth potential (currently 35% of revenue)
• Digital sales strength with 39% of revenue from online channels

Conclusion SELL at current levels. While Lululemon's fundamentals remain strong, the stock is showing technical weakness and trades at premium valuations. The recent price decline of 17.2% over the past year suggests market concerns about growth sustainability. Consider waiting for better entry points when technical indicators show improvement and valuation becomes more attractive.

Based on the provided data and context, I'll analyze LULU's price prediction for 2025:

Technical Analysis

The stock is currently showing bearish momentum with RSI at 32.61 indicating oversold conditions. The MACD is negative at -5.84 with a bearish divergence, suggesting continued downward pressure in the near term.

Fundamental Drivers

• Strong Financial Performance:

  • Q4 2024 EPS expected at $5.86, up 10.8% YoY
  • FY2025 projected EPS of $14.36, representing 12.5% growth
  • International revenue growth of 33% showcasing global expansion potential

• Valuation Metrics:

  • P/E: 39.18x
  • EV/EBITDA: 22.46x
  • P/S: 6.31x
  • Current market cap: $44.7B

Price Target Scenarios for 2025

Based on analyst consensus and technical analysis:

1. Bullish Case ($500):

• Probability 30%
• Driven by continued international expansion and margin improvements
• Supported by Oppenheimer's recent price target

2. Base Case ($408):

• Probability 50%
• Aligns with current analyst consensus target of $408.63
• Reflects 9.7% upside from current levels

3. Bearish Case ($350):

• Probability 20%
• Based on technical support levels and potential market volatility
• Considers current bearish momentum and market conditions

Most Likely Scenario: Base case of $408 by end of 2025, supported by:

• Strong operational execution
• Continued international growth
• Healthy margin expansion
• Current technical oversold conditions suggesting potential rebound

The stock is currently trading at $360.83 in pre-market, suggesting an attractive entry point for long-term investors given the projected upside to consensus targets.

The S1 support level for LULU Stock is $358.63 ,The R1 resistant level for LULU Stock is $396.19.

As of the end of day on 2025-02-26, the price of LULU Stock was $367.36.

The target price for LULU Stock according to analyst rating is 416.09, with the highest price target at 500.00 and the lowest at 220.00. Analysts have a Moderate Buy rating on LULU Stock overall.

The market cap of LULU is $44.7B.

Based on the provided data and recent market analysis, LULU appears to be overvalued for the following reasons:

Valuation Metrics

• Trading at a forward P/E of 39.18x, significantly higher than industry average of 13.55x
• Current P/S ratio of 6.31x and EV/EBITDA of 22.46x indicate premium valuation compared to peers
• Stock trades at a substantial premium to competitors like Columbia Sportswear (20.23x P/E) and Ralph Lauren (18.35x P/E)

Technical Analysis

• Stock has declined 9% year-to-date in 2024
• Currently trading at $457.89, showing weakness from 52-week high of $478.84
• RSI at 32.61 indicates oversold conditions but momentum remains negative

Growth & Fundamentals

• Revenue grew 20.1% YoY to $6.4B in first three quarters of FY2023
• Operating income improved 20% YoY to $1.2B
• However, growth rates may not justify the significant valuation premium
• International expansion remains limited at 16% of total revenues

Key Risks

• Intense competition in athleisure space
• Premium pricing strategy vulnerable in weaker consumer environment
• High inventory levels could pressure margins
• Valuation multiple compression risk if growth slows

The stock appears overvalued at current levels given the premium valuation metrics, recent price weakness, and potential growth headwinds. A more attractive entry point would likely emerge at lower valuation levels.

lululemon athletica inc. is engaged in the design, distribution, and retail of technical athletic apparel, footwear, and accessories. The Company’s segments include company-operated stores and direct to consumer. Its apparel assortment includes items, such as pants, shorts, tops, and jackets designed for a healthy lifestyle, including athletic activities, such as yoga, running, training, and other activities. It also offers apparel designed for being on the move and fitness-inspired accessories. Its technical athletic apparel, footwear, and accessories, which are sold through a chain of company-operated stores, direct to consumers through e-commerce, outlets, sales to wholesale accounts, license and supply arrangements, recommence, and sales from temporary locations. It also offers in-home connected fitness and associated content subscriptions through lululemon Studio. It operates stores in the United States, Canada, Australia, the United Kingdom, South Korea, Germany and others.

Based on the provided data and market analysis, here's a projection for LULU's stock price in 2030:

LULU stock is projected to reach $750-800 by 2030, driven by its robust international expansion strategy and strong financial fundamentals showing 12.5% annual earnings growth. The company's successful penetration into international markets, particularly demonstrated by 33% growth in international revenues, positions it well for sustained long-term growth. The premium valuation with current P/E of 39.18x and strong gross margins of 58.26% support this ambitious price target.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

LULU has a total of 38000 employees.