Lululemon Story

LULU -- USA Stock

USD 346.37 2.85 0.82%

Macroaxis Story

Lululemon Athletica is scheduled to announce its earnings today. The next earnings report is expected on the 9th of December 2020. Because some of us are getting excited about consumer cyclical space, it makes sense to review Lululemon Athletica in greater detail. Should we be more optimistic in anticipation of a recovery?

Published over three months ago

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Should you exit your Lululemon Athletica (NASDAQ:LULU) positions based on the newest analyst consensus?

Lululemon Athletica has performance score of 4 on a scale of 0 to 100. The company secures a Beta (Market Risk) of 0.7328, which conveys possible diversification benefits within a given portfolio. Let's try to break down what Lululemon's beta means in this case. As returns on the market increase, Lululemon Athletica returns are expected to increase less than the market. However, during the bear market, the loss on holding Lululemon Athletica will be expected to be smaller as well. Although it is extremely important to respect Lululemon Athletica price patterns, it is better to be realistic regarding the information on equity historical price patterns. The philosophy towards estimating future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing Lululemon Athletica technical indicators, you can presently evaluate if the expected return of 0.18% will be sustainable into the future. Lululemon Athletica right now secures a risk of 2.62%. Please verify Lululemon Athletica maximum drawdown, as well as the relationship between the skewness and day typical price to decide if Lululemon Athletica will be following its current price movements.

What is the right price you would pay to acquire a share of Lululemon Athletica? For most investors, it would be the price that gives them a wide margin of safety to have minimal downside risk. In other words, most investors are always looking for undervalued stocks. Even if the future performance is not entirely as expected, the loss of holding it is minimized, and the downside risk is negated. Please read more on our stock advisor page.

What is happening with Lululemon Athletica this year

Annual and quarterly reports issued by Lululemon Athletica are formal financial statements that are published yearly and quarterly and sent to Lululemon stockholders. The reports show and break down the current year's ongoing operations and discuss plans for the upcoming year. Annual reports have been a requirement from the Securities and Exchange Commission (SEC) for businesses owned by the public since 1934. Companies such as Lululemon Athletica often view their annual report as an effective marketing tool to disseminate their perspective on company future earnings or innovations. With this in mind, many companies devote large sums of money to making their reports attractive and informative. In such instances, the annual report becomes a forum through which a company can communicate to the general public any number of topics that may or may not be directly related to the actual data published in the reports.

How Lululemon utilizes its cash?

To perform a cash flow analysis of Lululemon Athletica, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Lululemon Athletica is receiving and how much cash it distributes out in a given period. The Lululemon Athletica cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Lululemon Athletica Net Cash Flow from Operations is comparatively stable at the moment as compared to the past year. Lululemon Athletica reported Net Cash Flow from Operations of 297.54 Million in 2020

An Additional Perspective On Lululemon Athletica

Earning per share calculations of Lululemon Athletica is based on official Zacks consensus of 11 analysts regarding Lululemon Athletica's future annual earnings. Given the historical accuracy of 90.89%, the future earnings per share of the company is estimated to be 4.2441 with the lowest and highest values of 3.8 and 5.28, respectively. Please note that this consensus of annual earnings estimates for the firm is an estimate of EPS before non-recurring items and including employee stock options expenses.

Is Lululemon a risky opportunity?

Let's check the volatility. Lululemon is looking slightly risky at this time. Whether you invest your money or manage your clients' funds, remember that it is easy to forget that behind Lululemon (NASDAQ:LULU) stock is an actual business venture. So, do not let stock picking become an abstract concept by ignoring the elementary risk calculations. acquiring a share of a Lululemon Athletica stock makes you a part-owner of that company.

Lululemon Athletica Current Consensus

Here is the newest trade recommendation based on an ongoing consensus estimate among financial analysis covering Lululemon Athletica. The Lululemon consensus assessment is calculated by taking the average estimates from all of the analysts covering Lululemon Athletica

Strong Buy

Buy

Hold

Strong Buy	17	58.62
Buy	2	6.9
Hold	10	34.48
Sell	0	0.0
Strong Sell	0	0.0

Will Lululemon Athletica private investors go mental after another drop?

Newest downside variance is at 7.74. Lululemon Athletica currently demonstrates below-verage downside deviation. It has Information Ratio of 0.04 and Jensen Alpha of 0.14. However, we do advice investors to further question Lululemon Athletica expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Final Perspective on Lululemon Athletica

Whereas some firms under the apparel retail industry are still a bit expensive, Lululemon Athletica may offer a potential longer-term growth to private investors. To conclude, as of the 8th of September 2020, we believe that at this point, Lululemon Athletica is very steady with very low odds of financial distress within the next 2 years. From a slightly different point of view, the entity appears to be overvalued. Our final 30 days buy-hold-sell advice on the firm is Cautious Hold.

About Contributor

Ellen Johnson is a Member of Macroaxs Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Lululemon Athletica. Please refer to our Terms of Use for any information regarding our disclosure principles.

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