Lululemon Athletica Inc Stock Forecast:
According to 19 analysts’ forecasts for Lululemon Athletica Inc, the average target price for the company over the next 12 months is USD 400.72. These analysts rate the stock as a “Strong Buy.” Stock Target Advisor‘s own analysis also leans towards a positive outlook, describing it as “Slightly Bullish,” based on 8 positive signals and 4 negative signals. Currently, Lululemon Athletica Inc’s stock price is USD 316.83. In the past week, the stock price has risen by +2.83%, but over the past month and year, it has decreased by -0.81% and -1.17%, respectively.
Analysts Coverage Change:
Robert W Baird maintains an Outperform rating for Lululemon Athletica and lowers the price target to $410 from $435 on the company’s stock.
Positive Fundamentals:
Lululemon Athletica’s high market capitalization means that it is one of the largest entities in its sector, providing greater stability. The stock has also demonstrated superior risk-adjusted returns, performing well compared to its sector peers for a hold period of at least 12 months and placing it in the top quartile. In addition, the stock’s low volatility compared to its sector peers is also seen as positive, although it may limit returns.
Furthermore, Lululemon Athletica’s management has delivered better return on equity and return on assets than its peers in the most recent four quarters, putting it in the top quartile. The company has also demonstrated positive total cash flow and positive total free cash flow in the most recent four quarters. Additionally, the company’s revenue growth over the previous five years has been in the top quartile compared to its sector.
All of these factors are seen as positive indicators of the company’s financial health and potential for future growth, making Lululemon Athletica a potentially attractive investment opportunity.
Negative Fundamentals:
The concerns with Lululemon Athletica stock are mainly centered around its high valuation when compared to its peers. The stock is considered overpriced based on various metrics such as price to earnings, book value, cash flow, and free cash flow. This means that investors are paying a premium for each dollar of earnings, book value, or cash flow generated by the company, which may not be justified by its current financial performance or growth prospects.
Investors should exercise caution before investing in Lululemon Athletica stock given its high valuation compared to its peers. While the company has a strong brand and loyal customer base, its current stock price may not be sustainable in the long run, especially if there is a slowdown in growth or any adverse events impacting the business. As with any investment, it is important to do thorough research and analysis before making a decision.
FA Score (Fundamental Analysis):
The fundamental analysis of Lululemon Athletica Inc. is “Slightly Bullish” with a FA score of 6.7 out of 10, where 0 is very bearish and 10 is very bullish.
