Lululemon Athletica Inc (LULU, Financial) has recently captured the attention of investors and market analysts alike, thanks to its strong financial performance and promising growth prospects. With a current share price of $308.33 and a modest daily gain of 0.56%, the company has experienced a significant price adjustment with a three-month change of -31.66%. However, a detailed analysis based on the GF Score indicates that Lululemon Athletica Inc is poised for substantial future growth.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks based on five key aspects: financial strength, profitability, growth, value, and momentum. These components are weighted differently to calculate a composite score that ranges from 0 to 100, with higher scores indicating greater potential for long-term outperformance. Lululemon Athletica Inc boasts a GF Score of 96 out of 100, reflecting its strong potential to outperform the market.
- Financial strength rank: 7/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 8/10
- Momentum rank: 5/10
Understanding Lululemon Athletica Inc's Business
Lululemon Athletica, with a market cap of $38.85 billion and annual sales of $9.62 billion, operates at an impressive operating margin of 22.95%. Founded in 1998 and headquartered in Vancouver, Canada, Lululemon designs, distributes, and retails athletic apparel and accessories. The company's product range includes items for yoga, running, and other athletic and leisure activities, sold through over 700 stores and various digital platforms globally.
Financial Strength and Stability
Lululemon Athletica Inc's financial robustness is evidenced by its Altman Z-Score of 11.66, indicating a low probability of financial distress. Additionally, its strategic debt management is reflected in a Debt-to-Revenue ratio of 0.15, underscoring a prudent approach to leveraging.
Exceptional Profitability and Growth
The company's Profitability Rank is outstanding, supported by a consistent increase in operating margins over the past five years. The Gross Margin has also shown improvement, highlighting Lululemon's efficiency in converting sales into profits. The Piotroski F-Score further confirms its healthy financial condition.
Conclusion: A Promising Investment?
Considering Lululemon Athletica Inc's strong financial metrics, profitability, and growth, the GF Score underscores the company's exceptional position for potential market outperformance. Investors looking for similar opportunities can explore other high-scoring companies using the GF Score Screen. Is Lululemon Athletica Inc the next addition to your investment portfolio?
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
