From Nasdaq, Inc.:



Lululemon’s stock has seen strong gains over the past year, but there are concerns about its long-term potential. The company’s share price has increased by 57% year-to-date, driven by improving stock market sentiment, strong financial results, and its inclusion in the S&P500 index. However, the current stock price is considered slightly overbought, with a price-to-earnings ratio of 64x, compared to a fairer ratio of 41x using projected FY’23 earnings. The company is expected to see modest declines in the long term, with a potential 12% lower price than the current market value. Despite a strong performance in Q3 and an increased outlook for 2023, there is uncertainty about the company’s ability to outperform the S&P 500 over the next 12 months. Lululemon aims to double its revenue by fiscal 2026, but fourth-quarter sales projections are lower than expected, possibly due to economic uncertainty. While the company’s revenue is projected to increase by 19% year-over-year, there are concerns about its ability to meet its ambitious growth targets. Overall, Lululemon’s stock has been volatile, with returns of 12% in 2021, -18% in 2022, and 57% in 2023, compared to 27%, -19%, and 23% for the S&P 500, indicating inconsistent performance relative to the benchmark index.



Original: Lululemon Stock Up 57% This Year, Where Is It Headed?