Overall LULU gets a fundamental rating of 7 out of 10. We evaluated LULU against 45 industry peers in the Textiles, Apparel & Luxury Goods industry. LULU scores excellent points on both the profitability and health parts. This is a solid base for a good stock. LULU has a decent growth rate and is not valued too expensively. This makes LULU very considerable for quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

LULU had positive earnings in the past year.
LULU had a positive operating cash flow in the past year.
Each year in the past 5 years LULU has been profitable.
In the past 5 years LULU always reported a positive cash flow from operatings.

1.2 Ratios

With an excellent Return On Assets value of 21.88%, LULU belongs to the best of the industry, outperforming 97.78% of the companies in the same industry.
With an excellent Return On Equity value of 38.67%, LULU belongs to the best of the industry, outperforming 91.11% of the companies in the same industry.
LULU has a better Return On Invested Capital (28.30%) than 95.56% of its industry peers.
LULU had an Average Return On Invested Capital over the past 3 years of 29.73%. This is significantly above the industry average of 11.59%.

		Industry Rank	Sector Rank
ROA	21.88%
ROE	38.67%
ROIC	28.3%

ROA(3y)20.32%

ROA(5y)18.95%

ROE(3y)35.25%

ROE(5y)32.87%

ROIC(3y)29.73%

ROIC(5y)26.99%

1.3 Margins

Looking at the Profit Margin, with a value of 15.72%, LULU belongs to the top of the industry, outperforming 95.56% of the companies in the same industry.
In the last couple of years the Profit Margin of LULU has remained more or less at the same level.
The Operating Margin of LULU (22.05%) is better than 93.33% of its industry peers.
In the last couple of years the Operating Margin of LULU has remained more or less at the same level.
LULU has a Gross Margin of 58.41%. This is in the better half of the industry: LULU outperforms 73.33% of its industry peers.
LULU's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	22.05%
PM (TTM)	15.72%
GM	58.41%

OM growth 3Y2.55%

OM growth 5Y1.15%

PM growth 3Y3.21%

PM growth 5Y1.1%

GM growth 3Y0.89%

GM growth 5Y1.17%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

LULU has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
LULU has less shares outstanding than it did 1 year ago.
The number of shares outstanding for LULU has been reduced compared to 5 years ago.
There is no outstanding debt for LULU. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

An Altman-Z score of 7.47 indicates that LULU is not in any danger for bankruptcy at the moment.
LULU has a better Altman-Z score (7.47) than 93.33% 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.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Altman-Z	7.47

ROIC/WACC2.65

WACC10.67%

2.3 Liquidity

A Current Ratio of 2.13 indicates that LULU has no problem at all paying its short term obligations.
LULU's Current ratio of 2.13 is fine compared to the rest of the industry. LULU outperforms 62.22% of its industry peers.
LULU has a Quick Ratio of 1.05. This is a normal value and indicates that LULU is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.05, LULU perfoms like the industry average, outperforming 53.33% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.13
Quick Ratio	1.05

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 4.19% 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 24.37% on average per year.
The Revenue has grown by 8.76% in the past year. This is quite good.
LULU shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 21.62% yearly.

EPS 1Y (TTM)4.19%

EPS 3Y23.52%

EPS 5Y24.37%

EPS Q2Q%-9.76%

Revenue 1Y (TTM)8.76%

Revenue growth 3Y19.17%

Revenue growth 5Y21.62%

Sales Q2Q%7.06%

3.2 Future

Based on estimates for the next years, LULU will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.56% on average per year.
The Revenue is expected to grow by 6.73% on average over the next years.

EPS Next Y-9.05%

EPS Next 2Y-6.46%

EPS Next 3Y-1.37%

EPS Next 5Y8.56%

Revenue Next Year4.66%

Revenue Next 2Y4.5%

Revenue Next 3Y4.68%

Revenue Next 5Y6.73%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 13.24, which indicates a correct valuation of LULU.
Compared to the rest of the industry, the Price/Earnings ratio of LULU indicates a somewhat cheap valuation: LULU is cheaper than 77.78% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of LULU to the average of the S&P500 Index (27.21), we can say LULU is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 14.85, the valuation of LULU can be described as correct.
Based on the Price/Forward Earnings ratio, LULU is valued a bit cheaper than 66.67% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of LULU to the average of the S&P500 Index (24.26), we can say LULU is valued slightly cheaper.

		Industry Rank	Sector Rank
PE	13.24
Fwd PE	14.85

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, LULU is valued a bit cheaper than 75.56% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, LULU is valued a bit cheaper than the industry average as 68.89% of the companies are valued more expensively.