Summary
This week’s stock analysis is Lululemon Athletica (LULU), a leading athletic apparel company founded in 1998 by Chip Wilson. The company has made significant strides, reporting adjusted profit of $1.16 per share and sales growth of 88% to nearly $1.23 billion. With a three-year annualized earnings growth rate of 19%, Lululemon’s core women’s business continues to excel, while the company expands into new markets like Europe and Asia. As analysts forecast a bright outlook for 2021 with sales expected to reach $5.6 billion, traders are advised to keep an eye on the company’s upcoming earnings announcement, scheduled for September 14th.
Company Overview
Lululemon Athletica was founded in 1998 by Chip Wilson in Vancouver, British Columbia, Canada. The company opened its first standalone store in November 2000 and went public in July 2007 with an initial public offering (IPO) of $327.6 million. Lululemon has since appeared on Fortune’s Fastest-Growing Companies list three times, including in 2013. The company is primarily known for its high-quality athletic wear, which includes tops, yoga pants, shorts, sweaters, jackets, and undergarments.
Financial Performance
On the most recent earnings call, Lululemon reported adjusted profit of $1.16 per share, up 404% from the year-ago quarter. Sales jumped 88% to nearly $1.23 billion, with analysts forecasting earnings of $1.10 to $1.15 per share for the second quarter of 2021 on revenue of $1.2 billion. The company’s core women’s business continues to excel, but Lululemon has also expanded into new markets like Europe and Asia.
Expansion and Growth
Lululemon has a strong presence in over 140 malls worldwide, with 305 brick-and-mortar stores across North America, Europe, and Asia. However, the company faces significant risks due to declining mall traffic and online competition. To mitigate these challenges, Lululemon is investing heavily in e-commerce and digital marketing efforts.
Analyst Ratings
Twenty-six Wall Street analysts have issued ratings and price targets for Lululemon Athletica over the past 12 months. The consensus analyst rating suggests that the stock has a possible upside of 8.28% to $394.33, with a high price target of $500.00 and a low price target of $275.00.
Technical Analysis
When analyzing technical charts for Lululemon Athletica (LULU), traders should consider several key metrics, including the 52-week trading range, earnings announcements, and support and resistance levels. The stock has traded as high as $399.90 and as low as $269.28 over the past year, with an average weekly trading range of $2.51.
VantagePoint A.I. Analysis
Using VantagePoint Software’s artificial intelligence (A.I.) analysis tools, traders can gain valuable insights into Lululemon Athletica’s stock price movements. The software’s predictive blue line, which forecasts future price movements based on intermarket analysis and statistical correlations, provides a comprehensive view of the market.
Daily Price Range Forecast
One of the most powerful features in VantagePoint A.I. Software is its Daily Price Range prediction forecast, which allows traders to fine-tune their entries and exits into the market. By analyzing Lululemon Athletica’s price movements over time, traders can identify opportunities to buy weakness towards the lower end of the daily price forecast.
Intermarket Analysis
Lululemon Athletica’s stock is influenced by various intermarket factors, including interest rates, crude oil prices, and volatility in the dollar. Understanding these key drivers of price action allows traders to uncover other industries that impact LULU’s price movement.
Conclusion
Lululemon Athletica (LULU) has a strong track record of growth, with analysts forecasting significant earnings and sales increases in 2021. As the company prepares for its upcoming earnings announcement, scheduled for September 14th, traders are advised to keep an eye on LULU’s stock price movements. With VantagePoint A.I. Software’s advanced analysis tools, traders can gain valuable insights into Lululemon Athletica’s financial performance and identify opportunities to trade the stock.
Disclaimer
Trading involves significant risks, and it is not prudent or advisable to make trading decisions that are beyond your financial means or involve trading capital that you are not willing and capable of losing.