This story originally appeared on Zacks
Lululemon (LULU) closed at $319.94 in the latest trading session, marking a +0.74% move from the prior day. This move outpaced the S&P 500’s daily loss of 0.24%. Elsewhere, the Dow lost 0.49%, while the tech-heavy Nasdaq lost 0.04%.
Coming into today, shares of the athletic apparel maker had gained 0.53% in the past month. In that same time, the Consumer Discretionary sector gained 1.86%, while the S&P 500 gained 0.73%.
Wall Street will be looking for positivity from Lululemon as it approaches its next earnings report date. In that report, analysts expect Lululemon to post earnings of $3.27 per share. This would mark year-over-year growth of 26.74%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.13 billion, up 23.37% from the year-ago period.
Investors should also note any recent changes to analyst estimates for Lululemon. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.1% higher within the past month. Lululemon is currently a Zacks Rank #3 (Hold).
Looking at its valuation, Lululemon is holding a Forward P/E ratio of 34.82. This valuation marks a premium compared to its industry’s average Forward P/E of 12.42.
It is also worth noting that LULU currently has a PEG ratio of 1.9. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Textile – Apparel industry currently had an average PEG ratio of 1.02 as of yesterday’s close.
The Textile – Apparel industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 26, putting it in the top 11% of all 250+ industries.
The Zacks Industry Rank includes is listed in order 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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