LULU

Lululemon Athletica inc.

Consumer


Presented:03/30/2023
Price:$358.09
Cap:$45.66B
Current Price:$287.48
Cap:$35.30B

Presented

Date03/30/2023
Price$358.09
Market Cap$45.66B
Ent Value$39.64B
P/E Ratio53.62x
Book Value$24.73
Div Yield0%
Shares O/S127.52M
Ave Daily Vol2,015,821
Short Int3.04%

Current

Price$287.48
Market Cap$35.30B
lululemon athletica, Inc. engages in the designing, distributing and retail of athletic apparel and accessories. It operates through the following business segments: Company-Operated Stores, Direct to Consumer. The Company-Operated Stores segment comprises lululemon and ivivva brands; and specialize in athletic wear for female youth. The Direct to Consumer segment is involved in the e-commerce business, building brand awareness, particularly in new markets. The company was founded by Dennis J. Wilson in 1998 and is headquartered in Vancouver, Canada.

Publicly traded companies mentioned herein: Lululemon Athletica Inc. (LULU), Nike Inc. (NKE), Walmart Inc. (WMT),

Highlights

The presenter is a long shares of Lululemon Athletica (LULU), seeing a favorable risk-reward setup given his higher EPS estimates. LULU has the ability to post $14+ or more in EPS in CY24, versus consensus of $13.30. He argues LULU shares should trade at parity with Nike (NKE), which would be 30-35x, not out of the norm with its historical range. Trading at parity with NKE would result in a $455 share price in a year's time, representing a ~25% increase. Bears are overly critical of LULU’s management team as the company has missed margins three quarters in a row, and made investments in Mirror LULU's acquisition of Mirror and footwear. The PE multiple has gotten down to levels relative to the S&P 500 that we haven’t seen since the 2015 to 2017 period when fundamentals were much weaker. Also, the EPS multiple gap between LULU and NKE is near the largest it has ever been.

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Idea Discussion

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