Lululemon Athletica Inc (LULU, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance. Despite a daily loss of 1.26% and a three-month decline of 8.01%, the company's stock price stands at $276.49. A detailed analysis, supported by the GF Score, indicates that Lululemon Athletica Inc is poised for significant growth in the foreseeable future.
What Is the GF Score?
The GF Score is a proprietary ranking system from GuruFocus, assessing stocks based on five key valuation aspects. This system has proven effective in predicting long-term stock performance from 2006 to 2021. A higher GF Score correlates with greater potential returns. The components of the GF Score include Financial Strength, Profitability, Growth, GF Value, and Momentum. Each component is weighted differently to reflect its impact on stock performance. Lululemon Athletica Inc boasts a GF Score of 92 out of 100, indicating a strong potential for market outperformance.
Understanding Lululemon Athletica Inc's Business
Lululemon Athletica designs and sells athletic apparel and accessories, catering to both leisure and sports activities, including yoga and running. The company operates over 700 stores across approximately 20 countries and also engages in e-commerce. Founded in 1998 and headquartered in Vancouver, Canada, Lululemon has a market cap of $33.95 billion and annual sales of approximately $9.99 billion, with an operating margin of 23.02%.
Financial Strength Breakdown
Lululemon Athletica Inc's financial robustness is reflected in its Financial Strength Rank of 8/10. The company's Altman Z-Score of 11.36 suggests a strong buffer against financial distress. Additionally, its strategic debt management is evidenced by a Debt-to-Revenue ratio of 0.15, underscoring solid financial health.
Profitability Rank Breakdown
Lululemon Athletica Inc's Profitability Rank stands at a perfect 10/10. The company's Operating Margin has shown a positive trend over the past five years, indicating increasing efficiency in its operations. This is complemented by a consistent rise in Gross Margin, demonstrating an enhanced ability to convert sales into profits.
Growth Rank Breakdown
The company's commitment to growth is evident from its high Growth Rank of 10/10. Lululemon Athletica Inc has achieved a 3-Year Revenue Growth Rate of 31.1%, outperforming 88.2% of its peers in the Retail - Cyclical industry. This growth trajectory is further highlighted by significant increases in EBITDA over recent years.
Conclusion
Considering Lululemon Athletica Inc's strong financial strength, impressive profitability, and robust growth metrics, the GF Score effectively highlights the company's superior position for potential market outperformance. For investors seeking similar opportunities, explore more companies with strong GF Scores using 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.
