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Should you buy Lululemon stock? (July 2024)
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Lululemon stock analysis. Ticker: $LULU
Lululemon stock has fallen 45% over the past year to under $300 a share. At the latest price, Lululemon has a market cap of 35 billion dollars. With just under 2 billion of cash on the balance sheet the company’s enterprise value is 33.5 billion.
Revenue over the last 12 months comes to 9.8 billion with 1.6 billion of net income and 1.7 billion of free cash flow. So Lululemon stock is now valued at 22 times earnings and 19 times free cash flow. That valuation is right at the bottom of the company’s historical range at a level not seen since 2017.
Lululemon stock has declined this year as investors worry about slowing growth. Management expects growth of 11-12% this year which is much lower than the company is used to. But the most worrying aspect is Lululemon’s North American segment which makes up 61% of total revenue. Growth in that region has slowed from 30% in 2022 to just 2% in the latest quarter.
And so the big concern is that consumers are going cold over the Lululemon brand. Bears points to changing demand for athletic leisure and competition from brands like On Cloud, Alo and Viouri. Apparel is historically a difficult area to invest in, consumers can be fickle and there’s no shortage of brands that have risen and fallen over the years.
#investing #stocks #stockstobuy #3mb
Lululemon stock has fallen 45% over the past year to under $300 a share. At the latest price, Lululemon has a market cap of 35 billion dollars. With just under 2 billion of cash on the balance sheet the company’s enterprise value is 33.5 billion.
Revenue over the last 12 months comes to 9.8 billion with 1.6 billion of net income and 1.7 billion of free cash flow. So Lululemon stock is now valued at 22 times earnings and 19 times free cash flow. That valuation is right at the bottom of the company’s historical range at a level not seen since 2017.
Lululemon stock has declined this year as investors worry about slowing growth. Management expects growth of 11-12% this year which is much lower than the company is used to. But the most worrying aspect is Lululemon’s North American segment which makes up 61% of total revenue. Growth in that region has slowed from 30% in 2022 to just 2% in the latest quarter.
And so the big concern is that consumers are going cold over the Lululemon brand. Bears points to changing demand for athletic leisure and competition from brands like On Cloud, Alo and Viouri. Apparel is historically a difficult area to invest in, consumers can be fickle and there’s no shortage of brands that have risen and fallen over the years.
#investing #stocks #stockstobuy #3mb
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