Lululemon (LULU) Outpaces Stock Market Gains: What You Should Know

Lululemon (LULU) closed at $204.96 in the latest trading session, marking a +0.93% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.28%. Meanwhile, the Dow gained 0.09%, and the Nasdaq, a tech-heavy index, added 0.4%.

Coming into today, shares of the athletic apparel maker had gained 3.95% in the past month. In that same time, the Consumer Discretionary sector lost 2.35%, while the S&P 500 lost 0.14%.

Investors will be hoping for strength from LULU as it approaches its next earnings release. In that report, analysts expect LULU to post earnings of $0.93 per share. This would mark year-over-year growth of 24%. Meanwhile, our latest consensus estimate is calling for revenue of $894.65 million, up 19.66% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.74 per share and revenue of $3.85 billion. These totals would mark changes of +23.44% and +17.2%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for LULU. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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, 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 0.03% higher within the past month. LULU currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that LULU has a Forward P/E ratio of 42.87 right now. For comparison, its industry has an average Forward P/E of 14.84, which means LULU is trading at a premium to the group.

Meanwhile, LULU's PEG ratio is currently 2.36. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Textile - Apparel was holding an average PEG ratio of 2.02 at yesterday's closing price.

The Textile - Apparel industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 177, which puts it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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