Lululemon athletica (LULU) just delivered a mixed quarter that is stirring up fresh debate, with healthy international growth offset by sluggish U.S. demand, weaker same store sales, and a cut to full year revenue guidance.
See our latest analysis for lululemon athletica.
The latest quarter comes after a bruising stretch, with the 1 year total shareholder return down about 52 percent. At the same time, a recent 1 month share price return of roughly 13 percent hints that pessimism might be easing as investors reassess lululemon athletica’s long term growth and valuation story.
If this kind of reset has you rethinking your watchlist, it could be a good moment to scout other consumer names and explore auto manufacturers as a fresh hunting ground for ideas.
With shares now trading close to analyst targets but still at a hefty intrinsic discount, the puzzle is clear: is lululemon an unloved growth story at a rare markdown, or has the market already priced in its next chapter?
With lululemon athletica’s fair value estimate sitting just above the last close, the prevailing narrative frames today’s price as a modestly discounted entry point.
Cost mitigation strategies in response to new tariffs and the removal of the de minimis exemption, including selective price increases, vendor negotiations, and supply chain optimization, are expected to lessen pressure on gross margins in 2026 and beyond, helping stabilize free cash flow and earnings despite near term headwinds.
Curious how modest growth, pressured margins, and a future earnings multiple still add up to upside from here? The narrative’s projections might surprise you.
Result: Fair Value of $193.54 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, stubborn U.S. weakness and execution missteps amid heavier competition could sap pricing power and margins, quickly unwinding the modest undervaluation case.
Find out about the key risks to this lululemon athletica narrative.
If this view does not fully resonate, or you prefer to dig into the numbers yourself, you can build a personalised thesis in minutes: Do it your way.
A great starting point for your lululemon athletica research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
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