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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
LULU — frequently asked questions
Is Lululemon Athletica Inc. overvalued?
In our latest published analysis dated 2026-05-19, LULU looks meaningfully undervalued. The price recorded at analysis is USD 119 versus our fair value of USD 228; the high endpoint is presented separately as potential value of USD 282. That implies roughly 91.7% upside to fair value at that date.
Our latest published report, analyzed 2026-05-19, gives LULU a fair value of USD 228 and a potential value of USD 282. The conclusion is triangulated across multiple valuation models and weighted by reliability for Lululemon Athletica Inc.'s archetype; it is a dated research output, not a live price.
Should I buy LULU now?
Our latest published rating for LULU, analyzed 2026-05-19, is Strong Buy. Lululemon Athletica Inc. looks meaningfully undervalued at the analysis-date price of USD 119 versus fair value of USD 228; potential value is USD 282. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for LULU?
The dedicated bear-case section in our report analyzed 2026-05-19 documents Lululemon Athletica Inc.'s material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is LULU's rating?
Our latest published rating for LULU, analyzed 2026-05-19, is Strong Buy, with a published moat assessment of 6.5/10 (Narrow). It reflects our fair value of USD 228, the potential value of USD 282, and the price recorded at analysis (USD 119).
Lululemon remains a high-quality compounder with exceptional ROIC (25.8%) and solid operating margins (20%+). However, a near-term growth digestion phase—evidenced by expected negative EPS growth in the current year—requires anchoring revenue and earnings to realistic lower-single digit growth paths before assuming trend stabilization.
Lululemon remains a high-quality compounder with exceptional ROIC (25.8%) and solid operating margins (20%+). However, a near-term growth digestion phase—evidenced by expected negative in the current year—requires anchoring and earnings to realistic lower-single digit growth paths before assuming trend stabilization.
Consumer demand for premium athleisure remains structurally robust, and international market penetration accelerates rapidly.
Recomendação da casa
Strong Buy, driven by the extreme dislocation between current implied expectations and the reality of a temporary earnings digestion phase.
Visão geral da empresa
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. It offers pants, shorts, tops, and jackets for athletic activities, such as yoga, running, training, and other activities. The company also provides fitness-inspired accessories. It sells its products through company-operated stores; seasonal stores, pop-ups, university campus retailers, and yoga and fitness studios; outlets; Like New, a re-commerce program; and its e-commerce website. The company was founded in 1998 and is based in Vancouver, Canada.
§2 Cenário pessimistaEN
A severe recession combined with an accelerated shift in athleisure trends could force elevated markdowns, permanently impairing gross margins and compressing ROIC toward the cost of capital.
Increased competition and a highly promotional environment permanently decelerate top-line growth and compress valuation multiples to low-teens P/E levels.
Structural degradation in gross margin would demonstrate that brand pricing power is eroding against rising premium competitors, forcing aggressive markdown discounting and permanently damaging long-term unit economics.
Atual:56.6% for the period ended 2026-01-31
Alerta seDeclining below 50.0% over a 12-month period
The highlighted base cell is anchored to valuation synthesis sensitivity reference ($228.48). It is the reference value for this grid, not a separate standalone fair-value claim.
If near-term EPSguidance misses but gross margins hold firm, continue accumulating. If gross margins severely break down, reassess the long-term structural moat conviction.
Em linha
Hold
Gatilho: In-line results
If near-term EPSguidance misses but gross margins hold firm, continue accumulating. If gross margins severely break down, reassess the long-term structural moat conviction.
Aquém
Reassess
Gatilho: Downside surprise
If near-term EPSguidance misses but gross margins hold firm, continue accumulating. If gross margins severely break down, reassess the long-term structural moat conviction.
Qualidade dos lucros
If near-term EPSguidance misses but gross margins hold firm, continue accumulating. If gross margins severely break down, reassess the long-term structural moat conviction.
Warning level: Declining below 50.0% over a 12-month period. Structural degradation in gross margin would demonstrate that brand pricing power is eroding against rising premium competitors, forcing aggressive markdown discounting and permanently damaging long-term unit economics.
Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.
Receita mais recente11,1 biCAGR da receita +15,4%
Margem operacional19,9%5 períodos fiscais
Fluxo de caixa livre mais recente921,7 miFY2026
Caixa líquido8,8 miFY2026
Detalhamento da demonstração de resultadosComo a escala do negócio se converte em lucro reportado.
StockMarketAgent.AI
Receita11,1 biCusto das receitas−4,8 biLucro bruto6,3 biDespesas operacionais−4,1 biLucro operacional2,2 biItens não operacionais e impostos−631,4 miLucro líquido1,6 bi
Dados do histórico financeiro
Receita
11.102.600.000
Custo das receitas
4.818.468.000
Lucro bruto
6.284.132.000
Despesas operacionais
4.073.517.000
Lucro operacional
2.210.615.000
Itens não operacionais e impostos
-631.432.000
Lucro líquido
1.579.183.000
Visão geral do balançoComo os ativos reportados são mantidos e financiados no período selecionado.
LULU trades at 9.0x forward earnings against a peer median of 26.5x; EV/EBITDA of 5.1x against a peer median of 20.6x; 6 peers.
§10 Setor e cicloEN
Fase do ciclo
Expansion
Normal capex phase with disciplined reinvestment, returning capital primarily through aggressive share repurchases.
Ciclo de alta
Consumer demand for premium athleisure remains structurally robust, and international market penetration accelerates rapidly.
Ciclo de baixa
A highly promotional retail environment erodes premium pricing power, and consumer wallet share shifts away from apparel.
Posicionamento
Normal capex phase with disciplined reinvestment, returning capital primarily through aggressive share repurchases.
§11 Gestão de posiçãoEN
Dimensionamento
Appropriate for a core allocation given the extreme dislocation between the 25.8% ROIC and the market's implied -4.5% perpetual growth rate.
Risco
Trim sizing if the multiple approaches the high-end calibrated 25x, or if gross margins structurally decay below 50% for three consecutive quarters.
Tranches de entrada
Nível
Ação
Por quê
Current / pullbacks
Immediate entry at current levels ($119.22), dynamically accumulating below $150.
Immediate entry at current levels ($119.22), dynamically accumulating below $150.
Tranches de saída
Nível
Ação
Thesis break
Trim sizing if the multiple approaches the high-end calibrated 25x, or if gross margins structurally decay below 50% for three consecutive quarters.
§12 Perspectivas dos investidoresEN
Bull view
Buy
Strong Buy. The current valuation embeds unprecedented macro pessimism that wholly ignores the company's elite compounding history and highly resilient balance sheet.
Strong Buy. The current valuation embeds unprecedented macro pessimism that wholly ignores the company's elite compounding history and highly resilient balance sheet.
Reassess the thesis against the named valuation, risk, and quarterly checkpoint evidence in this report.
§15Your notes
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
China expansion falters due to geopolitical friction or domestic preference, permanently removing the primary long-term growth engine from the terminal valuation.
FV impact
Moderate
Trigger
24-36 months
Macro Demand Shock
Low
Prolonged consumer discretionary weakness stalls the men's category growth and causes consecutive quarters of negative comparable store sales in North America.
A severe drop in sales momentum would suggest brand fatigue in core product categories, exacerbating inventory imbalances and requiring deep promotional clearances that compress overall retail earnings.
Atual:4.9% for the period ended 2026-01-31
Alerta seDecelerating below 2.0% over a 12-month period
Operating margin contraction would confirm that direct channel conversion softness and fixed retail store overhead are outpacing store productivity, eliminating the operating leverage underpinning premium valuation multiples.
Atual:19.9% for the period ended 2026-01-31
Alerta seCompressing below 16.0% over a 12-month period
Diminishing capital returns would indicate that store footprint additions and international retail expansions are generating lower economic yields, undermining management's reinvestment thesis and long-term moat durability.
Atual:25.8% as of the report's 2026-05-19 analysis date
Alerta seDeclining below 18.0% over a 12-month period
Failure to convert net accounting income into operational cash would reflect severe working capital misallocations and inventory bloat, restricting capital availability for share buybacks and store growth.
Atual:1.015 as of the report's 2026-05-19 analysis date
Alerta seFalling below 0.85x over a 12-month period
Monitor the threat against the report checkpoints.
Fashion and category substitution risk
medium
Monitor
Monitor the threat against the report checkpoints.
Warning level: Decelerating below 2.0% over a 12-month period. A severe drop in sales momentum would suggest brand fatigue in core product categories, exacerbating inventory imbalances and requiring deep promotional clearances that compress overall retail earnings.
Warning level: Compressing below 16.0% over a 12-month period. Operating margin contraction would confirm that direct channel conversion softness and fixed retail store overhead are outpacing store productivity, eliminating the operating leverage underpinning premium valuation multiples.
Atual25.8% as of the report's 2026-05-19 analysis date
Por que importa
Warning level: Declining below 18.0% over a 12-month period. Diminishing capital returns would indicate that store footprint additions and international retail expansions are generating lower economic yields, undermining management's reinvestment thesis and long-term moat durability.
Atual1.015 as of the report's 2026-05-19 analysis date
Por que importa
Warning level: Falling below 0.85x over a 12-month period. Failure to convert net accounting income into operational cash would reflect severe working capital misallocations and inventory bloat, restricting capital availability for share buybacks and store growth.
