NASDAQ:LULU—Positioned as a High-Growth Stock, Ready for a Potential Breakout.

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.

Analyzing Growth Metrics

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:LULU has achieved a 8 out of 10:

• The Earnings Per Share has grown by an nice 18.93% over the past year.
• Measured over the past years, LULU shows a very strong growth in Earnings Per Share. The EPS has been growing by 27.05% on average per year.
• LULU shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.02%.
• LULU shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 23.95% yearly.
• LULU is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.50% yearly.
• Based on estimates for the next years, LULU will show a quite strong growth in Revenue. The Revenue will grow by 11.04% on average per year.

Health Analysis for NASDAQ:LULU

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:LULU scores a 9 out of 10:

• LULU has an Altman-Z score of 12.47. This indicates that LULU is financially healthy and has little risk of bankruptcy at the moment.
• LULU has a better Altman-Z score (12.47) than 94.00% 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.
• A Current Ratio of 2.43 indicates that LULU has no problem at all paying its short term obligations.
• The Quick ratio of LULU (1.46) is better than 62.00% of its industry peers.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:LULU, the assigned 9 is noteworthy for profitability:

• LULU has a better Return On Assets (24.21%) than 96.00% of its industry peers.
• With an excellent Return On Equity value of 40.49%, LULU belongs to the best of the industry, outperforming 96.00% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 29.51%, LULU belongs to the top of the industry, outperforming 96.00% of the companies in the same industry.
• Measured over the past 3 years, the Average Return On Invested Capital for LULU is significantly above the industry average of 11.48%.
• The 3 year average ROIC (27.36%) for LULU is below the current ROIC(29.51%), indicating increased profibility in the last year.
• With an excellent Profit Margin value of 16.34%, LULU belongs to the best of the industry, outperforming 96.00% of the companies in the same industry.
• LULU's Profit Margin has improved in the last couple of years.
• Looking at the Operating Margin, with a value of 23.02%, LULU belongs to the top of the industry, outperforming 96.00% of the companies in the same industry.
• The Gross Margin of LULU (58.54%) is better than 74.00% of its industry peers.

Looking at the Setup

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:LULU currently has a 9 as setup rating:

LULU has an excellent technical rating and also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 321.18. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 317.56, a Stop Loss order could be placed below this zone. Another positive sign is the recent Pocket Pivot signal.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

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.