It's been a great afternoon session for lululemon athletica inc. investors, who saw their shares rise 3.2% to a price of $204.8 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
a Very Low P/E Ratio but Trades Above Its Graham Number:
lululemon athletica inc., together with its subsidiaries, designs, distributes, and retails technical athletic apparel, footwear, and accessories for women and men under the lululemon brand in the United States, Canada, Mexico, China Mainland, Hong Kong, Taiwan, Macau, and internationally. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 20.93 and an average price to book (P/B) ratio of 2.93. In contrast, lululemon athletica inc. has a trailing 12 month P/E ratio of 13.9 and a P/B ratio of 5.73.
lululemon athletica inc. has moved -23.4% over the last year compared to 15.0% for the S&P 500 — a difference of -38.4%. lululemon athletica inc. has a 52 week high of $423.32 and a 52 week low of $185.95.
Strong Revenue Growth but Similar Gross Margins to the Industry Average of 54.69%:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $3,979 | $4,402 | $6,257 | $8,111 | $9,619 | $10,588 |
| Gross Margins | 56% | 56% | 57% | 55% | 57% | 59% |
| Net Margins | 16% | 13% | 16% | 11% | 16% | 17% |
| Net Income (M) | $646 | $589 | $975 | $855 | $1,550 | $1,815 |
| Net Interest Expense (M) | $8 | -$1 | $1 | $4 | $43 | $0 |
| Depreciation & Amort. (M) | $162 | $185 | $224 | $292 | $379 | $443 |
| Diluted Shares (M) | 131 | 130 | 128 | 127 | 123 | 121 |
| Earnings Per Share | $4.93 | $4.52 | $7.63 | $6.74 | $12.62 | $15.02 |
| EPS Growth | n/a | -8.32% | 68.81% | -11.66% | 87.24% | 19.02% |
| Avg. Price | $180.36 | $290.77 | $372.05 | $321.38 | $511.29 | $206.11 |
| P/E Ratio | 34.68 | 61.73 | 46.8 | 45.91 | 39.88 | 13.12 |
| Free Cash Flow (M) | $386 | $574 | $995 | $328 | $1,644 | $1,583 |
| CAPEX (M) | $283 | $229 | $395 | $639 | $652 | $689 |
| Current Ratio | 2.19 | 2.07 | 1.99 | 2.32 | 2.0 | 2.28 |
lululemon athletica inc. has rapidly growing revenues and increasing reinvestment in the business and exceptional EPS growth. Additionally, the company's financial statements display generally positive cash flows and an excellent current ratio of 2.28. Furthermore, lululemon athletica inc. has similar gross margins to its peers.
