NASDAQ:LULU, a strong growth stock, setting up for a breakout.

Last update: Oct 2, 2023

In this article, we'll take a closer look at LULULEMON ATHLETICA INC (NASDAQ:LULU) as a potential candidate for growth investing. While it's important for investors to conduct their own research, LULULEMON ATHLETICA INC has piqued our interest by appearing on our strong growth and breakout radar. Let's explore further.

ChartMill's Evaluation of Growth

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:LULU scores a 8 out of 10:

LULU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 31.03%, which is quite impressive.
The Earnings Per Share has been growing by 31.13% on average over the past years. This is a very strong growth
LULU shows a strong growth in Revenue. In the last year, the Revenue has grown by 25.17%.
Measured over the past years, LULU shows a very strong growth in Revenue. The Revenue has been growing by 25.08% on average per year.
Based on estimates for the next years, LULU will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.54% on average per year.
The Revenue is expected to grow by 12.26% on average over the next years. This is quite good.

Analyzing Health Metrics

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:LULU, the assigned 9 reflects its health status:

LULU has an Altman-Z score of 15.61. This indicates that LULU is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of LULU (15.61) is better than 97.87% of its industry peers.
LULU has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
LULU has a Current Ratio of 2.40. This indicates that LULU is financially healthy and has no problem in meeting its short term obligations.

Assessing Profitability for NASDAQ:LULU

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:LULU scores a 9 out of 10:

LULU has a Return On Assets of 16.81%. This is amongst the best in the industry. LULU outperforms 97.87% of its industry peers.
LULU has a better Return On Equity (28.51%) than 89.36% of its industry peers.
The Return On Invested Capital of LULU (29.14%) is better than 100.00% of its industry peers.
LULU had an Average Return On Invested Capital over the past 3 years of 24.38%. This is significantly above the industry average of 10.58%.
The last Return On Invested Capital (29.14%) for LULU is above the 3 year average (24.38%), which is a sign of increasing profitability.
LULU has a Profit Margin of 11.40%. This is amongst the best in the industry. LULU outperforms 89.36% of its industry peers.
In the last couple of years the Profit Margin of LULU has grown nicely.
LULU's Operating Margin of 22.12% is amongst the best of the industry. LULU outperforms 97.87% of its industry peers.
In the last couple of years the Operating Margin of LULU has grown nicely.
With an excellent Gross Margin value of 56.75%, LULU belongs to the best of the industry, outperforming 82.98% of the companies in the same industry.

Why is NASDAQ:LULU a setup?

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NASDAQ:LULU this score is currently 8:

Besides having an excellent technical rating, LULU also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 401.23. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 383.98, a Stop Loss order could be placed below this zone.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

Our latest full fundamental report of LULU contains the most current fundamental analsysis.

Check the latest full technical report of LULU for a complete technical analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.