Lululemon Athletica Inc (LULU, Financial) has captured the attention of investors and market analysts alike, thanks to its strong financial performance and promising growth prospects. Despite a recent daily loss of 0.49% and a three-month decline of 30.78%, the company's stock price stands at $316.69, reflecting its resilience and potential for future growth. A detailed evaluation using the GF Score indicates that Lululemon Athletica Inc is poised for significant advancement in the coming years.
What Is the GF Score?
The GF Score is a proprietary ranking system from GuruFocus, designed to predict stock performance by evaluating five key aspects: financial strength, profitability, growth, GF Value, and momentum. The score ranges from 0 to 100, with higher scores indicating a greater likelihood of superior long-term performance. Lululemon Athletica Inc boasts a GF Score of 95 out of 100, suggesting a strong potential for market outperformance based on its high ranks in profitability (10/10), growth (10/10), and GF Value (8/10), though its momentum rank is slightly lower at 4/10.
Understanding Lululemon Athletica Inc's Business
Lululemon Athletica Inc, with a market cap of $39.59 billion and annual sales of $9.83 billion, is a leader in the design, distribution, and retail of premium athletic apparel and accessories for women, men, and girls. Founded in 1998 and headquartered in Vancouver, Canada, Lululemon has expanded its presence to over 700 stores worldwide, supported by a robust e-commerce platform. The company's operating margin stands impressively at 22.78%, reflecting its efficiency and profitability.
Financial Strength and Stability
Lululemon Athletica Inc's financial robustness is evidenced by its Financial Strength Rank of 7/10. The company's impressive Altman Z-Score of 12.89 indicates a strong buffer against financial distress, and its low Debt-to-Revenue ratio of 0.14 showcases prudent debt management.
Profitability and Efficiency
The Profitability Rank of Lululemon Athletica Inc is a perfect 10/10. The company's operating margin has shown a positive trend over the past five years, with a notable increase to 22.95% projected for 2024. Additionally, its Gross Margin has consistently improved, reaching 58.31% in 2024. These metrics underscore Lululemon's ability to convert sales into actual profits efficiently.
Growth Trajectory
Lululemon Athletica Inc is also distinguished by its strong growth metrics. The company's Growth Rank is 10/10, with a 3-Year Revenue Growth Rate of 31.1%, outperforming 89.44% of its peers in the Retail - Cyclical industry. This is complemented by a robust increase in EBITDA, highlighting the company's expanding operational capabilities.
Conclusion
Considering Lululemon Athletica Inc's comprehensive financial strength, exceptional profitability, and impressive growth metrics, the GF Score effectively highlights the company's strong position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores through the GF Score Screen.
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.
