It's that time of year again when girls start to pull out their lululemon leggings and spend all winter staying warm while looking trendy. I spent the morning analyzing Lululemon as a company and how they are performing. Lululemon is currently outperforming the big brand names, including Under Armour and Nike. I looked at Revenues, Cash, Debt and Market Capitalization to understand Lululemon's current performance. Their stock price is at an all time high in the last 6 months and therefore I was wondering do I buy this stock??
My Recommendation: Buy or Hold
Based on my analysis, Lululemon is performing well. It is currently overvalued compared to its competitors. However, there are other environmental factors to consider. The overall stock market is at an all time high which is generally pushing stock prices higher. If you current hold LuLuLemon Stock then I would say keep it. If you want to buy it I would recommend waiting for a correction in the market and then buying it while its cheap. Here is some of the data from my valuations:
As you can see, Lululemon has higher ratios above than their competitors. Based on the average of UA and Nike ratios I create the valuation for Lululemon. Their current numbers are outperforming their valuation.