Lululemon Athletica Intrinsic Stock Value – Lululemon Stock Soars 18%, Valuation Suggests Hold
December 20, 2023
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The recent 18% surge in the share price of Lululemon Athletica ($NASDAQ:LULU) has been welcomed by shareholders, but updated valuations suggest that investors should remain cautious and hold onto their shares. Lululemon is an apparel retailer specializing in yoga-inspired clothing, including yoga pants, shorts, tops, and jackets for women, men, and girls. The surge in the stock price was attributed to the company’s strong quarter one results, which surpassed analyst estimates. Lululemon’s earnings per share also beat estimates by a wide margin. Despite the impressive performance, analysts warn that the company’s current stock price is already priced at higher-than-average valuations.
As such, investors should wait for a pullback in the stock before buying more shares. Lululemon also faces increasing competition from other brands, which could limit its future growth potential. Overall, investors should exercise caution and hold onto their shares for now.
Analysis – Lululemon Athletica Intrinsic Stock Value
At GoodWhale, we recently conducted an analysis of LULULEMON ATHLETICA in order to gauge their overall wellbeing. After considering various factors, including LULULEMON ATHLETICA’s financials, growth prospects, and competitors, we calculated the intrinsic value of their shares to be around $481.4. This value was ascertained using our proprietary Valuation Line. Currently, LULULEMON ATHLETICA is trading at $506.9, which is a fair price but slightly overvalued by 5.3%. More…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Lululemon Athletica. More…
| Total Revenues | Net Income | Net Margin |
| 9.19k | 1k | 14.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Lululemon Athletica. More…
| Operations | Investing | Financing |
| 1.96k | -628.4 | -578.64 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Lululemon Athletica. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 6.02k | 2.5k | 27.93 |
Key Ratios Snapshot
Some of the financial key ratios for Lululemon Athletica are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 31.2% | 36.0% | 21.9% |
| FCF Margin | ROE | ROA |
| 14.2% | 35.7% | 20.9% |
Peers
Lululemon Athletica Inc is a yoga-inspired, technical athletic apparel company for women. The company operates in the United States, Canada, and Australia. Lululemon Athletica Inc’s main competitors are Buckle Inc, Citi Trends Inc, and Tilly’s Inc.
– Buckle Inc ($NYSE:BKE)
Buckle Inc is a leading retailer of casual apparel, footwear, and accessories for young men and women in the United States. As of 2022, the company has a market capitalization of 1.77 billion dollars and a return on equity of 55.65%. Buckle Inc operates over 450 stores in 44 states across the country, and offers its products through its website and catalog. The company’s mission is to provide great fashion at a great value for its customers.
– Citi Trends Inc ($NASDAQ:CTRN)
Citi Trends Inc is a value-priced retailer of urban fashion apparel, accessories and home décor. The company operates over 600 stores in 31 states. Citi Trends’ mission is to be the largest and most convenient source of trend-right fashion at the right price for our target demographic of urban youth.
– Tilly’s Inc ($NYSE:TLYS)
Tilly’s Inc is a company that operates in the retail industry. The company has a market cap of 239.38M as of 2022 and a return on equity of 19.35%. The company operates through two segments: stores and e-commerce. The company offers a variety of products including apparel, footwear, and accessories for men, women, and children. The company operates stores in California, Arizona, Nevada, and Texas.
Summary
Investing analysis of Lululemon Athletica Inc. (LULU) suggests that even after its 18% surge, the company is still somewhat fairly valued. Analysts have taken into account the company’s current market capitalization, sales growth, profitability, cash flow, and other metrics to evaluate the stock’s current worth. While the stock has had some positive momentum, analysts believe that it is wise to hold onto the shares before committing to buy more. It is worth noting that there is potential for more upside, though investors should proceed with caution given the current market environment.
