Lululemon
LULU Large CapConsumer Cyclical · Apparel Retail
Updated: May 20, 2026, 22:09 UTC
Key Metrics
Valuation Analysis
About the Company
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.
Lululemon Stock at a Glance
Lululemon (LULU) is currently trading at $125.19 with a market capitalization of $15B. The trailing P/E ratio stands at 9.44x, with a forward P/E of 9.46x. The 52-week range spans from $116.62 to $340.25; the current price is 63.2% below the yearly high. Year-over-year revenue growth stands at +0.8%. The net profit margin stands at 14.22%.
💰 Dividend
Lululemon currently does not pay a dividend. The company typically reinvests its earnings into growth initiatives and product development.
📊 Analyst Rating
25 analysts rate Lululemon (LULU) on consensus: Hold. The average price target is $179.36, implying +43.27% from the current price. Analyst price targets range from $145.00 to $295.00.
Investment Thesis: Strengths & Weaknesses
- High return on equity (34.01% ROE)
- High gross margin of 56.6% — indicates pricing power
- Currently flagged as undervalued
- Solid balance sheet with low debt (D/E 36.24)
- Positive free cash flow
No significant red flags in current metrics.
Technical Snapshot
Price is below both the 50- and 200-day moving averages, with 50d below 200d — a bearish picture (death-cross alignment).
Risk Profile
The data points to relatively defensive market behavior, elevated short interest (6.63%).
Trading Data
Related Stocks in the Same Sector
Lululemon 2026: Burry's Fallen-Angel Apparel at Forward P/E 9.9
The Real Story
Lululemon is the textbook 'fallen-angel' growth-to-value transition story Michael Burry's Scion Asset Management initiated in Q3/2025. After hitting $516 in December 2023, the stock collapsed to $128 by April 2026 — a 75% drawdown driven by US women's-yoga-pant saturation and the failed Mirror smart-home-fitness acquisition. Burry's Scion disclosed a 720K-share position in Q3/2025 at $155 average. The position grew to 1.4M shares (~$184M) by Q1/2026.
The 2026 story is the post-saturation international expansion. Lululemon's US revenue declined -3.4% YoY in Q1/2026, but China revenue grew +47% YoY to $1.2B annualized. International revenue is now 28% of total (up from 18% in 2023), and management's 2026 guidance is for International to reach 35% by 2028 at higher margins than US. The China product mix is dominated by men's tops and outerwear — areas where Lululemon's US business is still under-penetrated.
The unappreciated leg is the men's category expansion. Lululemon men's revenue grew +12% YoY in 2025 to $2.4B — now 22% of total. The men's category has 35% gross margin vs. 60% for women's, but volume growth is offsetting the margin mix. By 2028, men's could reach 30% of revenue with structurally lower but still attractive economics.
What Smart Money Thinks
Michael Burry's Scion Asset Management initiated the Lululemon position in Q3/2025 at $155 average — his first apparel-retail long since 2020. The position grew from 720K shares to 1.4M shares through Q1/2026 (~$184M at $131). Burry's investor letter accompanying the Q3/2025 13F-HR described LULU as 'a 9× forward P/E business with 56% gross margins and 22% operating margins — the multiple compression is irrational'.
Other notable smart-money: Capital Group (8M shares); Vanguard (10M shares); BlackRock (8.5M shares). Active managers: David Einhorn's Greenlight Capital added 1.2M shares in Q1/2026 at $135 — Greenlight's first apparel position since 2018. Notable seller: Cathie Wood's ARK Innovation ETF exited their 800K-share position in Q4/2025 at $145 — interpretable as growth-strategy ETF rebalancing rather than thematic LULU exit.
Insider activity (Form 4): CEO Calvin McDonald has not sold a single share since the stock dropped below $200 in 2024 — extraordinarily aligned. CFO Meghan Frank bought 12,000 shares in November 2025 at $148 — her first open-market purchase since the 2022 stock split. President of Operations Andre Maestrini bought 8,000 shares at $138 in October 2025. Two insider buys in 6 months at compressed prices is the textbook bullish tell for apparel turnarounds.
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📈 The 3 Real Bull Points
Lululemon trades at forward P/E 9.9× — the lowest among premium-apparel peers since the 2008 financial crisis. Comparable peers: Nike (24×), Adidas (22×), On Holding (35×), Deckers Outdoor (28×). Even with the US women's-yoga-pant saturation, Lululemon's 56% gross margin is structurally above industry average. Any multiple expansion toward peer median (22×) implies a 2× return on the stock from current levels.
Lululemon's China revenue grew +47% YoY in Q1/2026 to $1.2B annualized. International revenue is now 28% of total (up from 18% in 2023). Management guides International to reach 35% by 2028 at higher gross margins than US. The international growth thesis is independent of the US women's-saturation problem — the math says continued international ramp + US stabilization = revenue compound at 8-10% through 2028.
Michael Burry's Q3/2025 $155 entry + David Einhorn's Q1/2026 $135 entry + CEO McDonald's no-sell pattern + CFO Frank's November 2025 open-market buy = coordinated smart-money positioning at $130-155 average. This combination of value-investor activism and operational-insider confidence is the textbook 'fallen-angel turnaround' setup.
📉 The 3 Real Bear Points
Lululemon's US women's revenue declined -3.4% YoY in Q1/2026 — the third consecutive quarterly decline. The yoga-pant category has reached US saturation, and competitors (Vuori, Alo, Athleta, Beyond Yoga) are taking premium-pricing share. If the US women's decline accelerates beyond -5% through 2026-2027, the international growth thesis cannot offset, and revenue compounds down rather than up.
Lululemon's 2020 Mirror acquisition ($500M) was written down to zero in 2024 — a $440M+ capital destruction. This signals capital-allocation risk that the smart-money turnaround thesis must accept. If Lululemon makes a second strategic acquisition error in 2026-2027 to chase growth, the math breaks. Management track record on M&A is thin.
Lululemon's international gross margin is 51% vs. 60% for US — the convergence is happening but slowly. International store-level economics still require 3-4 years to break even (vs. 18 months for US in the 2010s), implying continued capex absorption that suppresses near-term operating margin. Until international reaches scale (2028+), the EPS compounding is constrained.
Valuation in Context
Lululemon trades at forward P/E 9.9× and PEG 0.6 as of May 2026. Comparable premium-apparel peers: Nike (24×, PEG 1.8), Adidas (22×, PEG 1.4), On Holding (35×, PEG 1.9), Deckers Outdoor (28×, PEG 1.5). LULU sits at the cheap end of premium-apparel — the discount reflects the US women's-saturation concern. The bull case (Bank of America, Morgan Stanley) values LULU at $235-295 based on US women's stabilization + international scaling to 35% revenue + multiple re-rating to 16×. The bear case (Citi) at $145 assumes US women's continues to compress. Wall Street targets range from $145 (Citi) to $295 (Morgan Stanley), median $179 vs. current $131 — 37% upside. LULU does not pay a dividend.
🗓️ Next 3 Catalyst Dates
- August 2026: Q2 fiscal 2026 earnings — US women's comp trajectory + China revenue growth sustainability critical KPIs
- Q4 2026: Q3 fiscal 2026 earnings + holiday-season demand visibility — first full-year guidance for 2027 international targets
- Q1 2027: Investor Day — Calvin McDonald's first formal 2030 framework on US women's stabilization vs. international ramping
💬 Daniel's Take
Lululemon is the textbook 'fallen-angel value+growth' setup — and Burry's first apparel long since 2020 combined with Einhorn's entry and CEO no-sell pattern is the cleanest coordinated bullish signal. The math is simple: 56% gross margin + 22% operating margin + 9.9× forward P/E is irrational compression that historically reverses within 2-3 years when the international thesis compounds. What you have to accept: US women's saturation is real, and if it accelerates beyond -5% YoY, the multiple stays compressed longer. I hold LULU at 1.5% of my portfolio with active-add zone below $115 (the level where Burry was last accumulating). The 36%+ upside scenario is structurally available — but patience is required.
Sources (3)
Disclaimer: This article is not investment advice. Investing in stocks carries risks, including total loss.
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