NASDAQ:LULU: a strong growth stock preparing for the next leg up?.

Last update: May 2, 2024

In this article we will dive into LULULEMON ATHLETICA INC (NASDAQ:LULU) as a possible candidate for growth investing. Investors should always do their own research, but we noticed LULULEMON ATHLETICA INC showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Deciphering NASDAQ:LULU's Growth Rating

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:LULU has received a 8 out of 10:

LULU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.79%, which is quite impressive.
The Earnings Per Share has been growing by 27.05% on average over the past years. This is a very strong growth
Looking at the last year, LULU shows a quite strong growth in Revenue. The Revenue has grown by 18.60% in the last year.
Measured over the past years, LULU shows a very strong growth in Revenue. The Revenue has been growing by 23.95% on average per year.
The Earnings Per Share is expected to grow by 15.84% on average over the next years. This is quite good.
The Revenue is expected to grow by 11.33% on average over the next years. This is quite good.

Health Analysis for NASDAQ:LULU

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:LULU has earned a 9 out of 10:

An Altman-Z score of 12.71 indicates that LULU is not in any danger for bankruptcy at the moment.
The Altman-Z score of LULU (12.71) is better than 96.00% 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 2.49. This indicates that LULU is financially healthy and has no problem in meeting its short term obligations.
With a decent Quick ratio value of 1.68, LULU is doing good in the industry, outperforming 70.00% of the companies in the same industry.

Evaluating Profitability: NASDAQ:LULU

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:LULU has earned a 9 out of 10:

Looking at the Return On Assets, with a value of 21.86%, LULU belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
LULU has a Return On Equity of 36.63%. This is amongst the best in the industry. LULU outperforms 92.00% of its industry peers.
LULU's Return On Invested Capital of 27.36% is amongst the best of the industry. LULU outperforms 98.00% of its industry peers.
LULU had an Average Return On Invested Capital over the past 3 years of 27.36%. This is significantly above the industry average of 10.07%.
The last Return On Invested Capital (27.36%) for LULU is above the 3 year average (27.36%), which is a sign of increasing profitability.
LULU has a better Profit Margin (16.12%) than 94.00% of its industry peers.
In the last couple of years the Profit Margin of LULU has grown nicely.
The Operating Margin of LULU (22.95%) is better than 98.00% of its industry peers.
LULU has a better Gross Margin (58.31%) than 80.00% of its industry peers.

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 7:

Although the technical rating is bad, LULU does present a nice setup opportunity. We see reduced volatility while prices have been consolidating in the most recent period. There is a support zone below the current price at 340.26, 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.

For an up to date full fundamental analysis you can check the fundamental report of LULU

For an up to date full technical analysis you can check the technical report of LULU

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.