Fact based stock research
Lululemon Athletica (NasdaqGS:LULU)
US5500211090
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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Lululemon Athletica stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 10 (worse than 90% compared with investment alternatives), Lululemon Athletica (Apparel, Accessories, Luxury, Canada) shares have lower financial characteristics compared with similar stocks. Shares of Lululemon Athletica are low in value (priced high) with a consolidated Value Rank of 3 (worse than 97% of alternatives), show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 8), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 10, is a sell recommendation based on Lululemon Athletica's financial characteristics. As the company Lululemon Athletica's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 3), low growth (Obermatt Growth Rank of 49), and risky financing practices (Obermatt Safety Rank of 8), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | Canada |
| Industry | Apparel, Accessories, Luxury |
| Index | Renewables Users, NASDAQ 100, NASDAQ |
| Size class | X-Large |
This stock has achievements: Top 10 Stock.
19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.
Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Lululemon Athletica
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 2 |
|
1 |
|
1 |
|
3 |
|
| GROWTH | ||||||||
| GROWTH | 90 |
|
47 |
|
100 |
|
49 |
|
| SAFETY | ||||||||
| SAFETY | 73 |
|
100 |
|
100 |
|
8 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
33 |
|
100 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
5 |
|
65 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 10 (worse than 90% compared with investment alternatives), Lululemon Athletica (Apparel, Accessories, Luxury, Canada) shares have lower financial characteristics compared with similar stocks. Shares of Lululemon Athletica are low in value (priced high) with a consolidated Value Rank of 3 (worse than 97% of alternatives), show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 8), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 10, is a sell recommendation based on Lululemon Athletica's financial characteristics. As the company Lululemon Athletica's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 3), low growth (Obermatt Growth Rank of 49), and risky financing practices (Obermatt Safety Rank of 8), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 2 |
|
1 |
|
1 |
|
3 |
|
| GROWTH | ||||||||
| GROWTH | 90 |
|
47 |
|
100 |
|
49 |
|
| SAFETY | ||||||||
| SAFETY | 73 |
|
100 |
|
100 |
|
8 |
|
| COMBINED | ||||||||
| COMBINED | 55 |
|
79 |
|
79 |
|
10 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 3 (worse than 97% compared with alternatives), Lululemon Athletica shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Lululemon Athletica. Price-to-Sales is 5 which means that the stock price compared with what market professionals expect for future profits is higher than 95% of comparable companies, indicating a low value concerning Lululemon Athletica's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 9, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Lululemon Athletica. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 19 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 3, is a sell recommendation based on Lululemon Athletica's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Lululemon Athletica? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Lululemon Athletica? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Lululemon Athletica may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 6 |
|
3 |
|
1 |
|
5 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 36 |
|
7 |
|
3 |
|
19 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 2 |
|
8 |
|
3 |
|
9 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 2 |
|
1 |
|
1 |
|
3 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Lululemon Athletica shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Lululemon Athletica. Sales Growth has a rank of 76, which means that, currently, professionals expect the company to grow more than 76% of its competitors. Profit Growth with a rank of 59 is also above average. But Capital Growth has only a rank of 41, and Stock Returns with 21 are also below-average. Stock returns for Lululemon Athletica have recently been below 79% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Lululemon Athletica. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with the Obermatt Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 88 |
|
78 |
|
100 |
|
76 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 38 |
|
47 |
|
89 |
|
59 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
52 |
|
85 |
|
41 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 72 |
|
29 |
|
79 |
|
21 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 90 |
|
47 |
|
100 |
|
49 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 8 (better than 8% compared with alternatives), the company Lululemon Athletica has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Lululemon Athletica is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Lululemon Athletica and the other two below average. Leverage is at a rank of 100 meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors.Refinancing is at a rank of 4, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 96% of its competitors. Liquidity is at a rank of 1, meaning that the company generates less profit to service its debt than 99% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 8 (worse than 92% compared with alternatives), Lululemon Athletica has a financing structure that is significantly riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Lululemon Athletica are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Lululemon Athletica and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 62 |
|
100 |
|
100 |
|
100 |
|
| REFINANCING | ||||||||
| REFINANCING | 18 |
|
1 |
|
6 |
|
4 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 95 |
|
97 |
|
97 |
|
1 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 73 |
|
100 |
|
100 |
|
8 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
54 |
|
67 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
6 |
|
98 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
27 |
|
85 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
98 |
|
100 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
33 |
|
100 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Lululemon Athletica from December 19, 2024.
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