Lululemon: Risks Largely Priced In, But Potential Reward Needs To Be Recognized
Summarize this article with:
Alpha Mantra492 FollowersFollow5ShareSavePlay(12min)CommentsSummaryLululemon (LULU) faces macro, execution, and regulatory headwinds, but current valuation offers compelling risk-reward for patient investors.LULU’s 14x forward PE is notably cheap versus peers, despite solid fundamentals and a three-year revenue CAGR that remains attractive.Execution gaps and tariff impacts have weighed on growth, but management is addressing internal issues and expanding aggressively in China.I assign a buy rating, expecting valuation to re-rate as headwinds abate and growth drivers, especially international, gain traction. tadamichi/iStock via Getty Images Introduction I was recently going through write-ups of Michael Burry and his point of view regarding the current AI landscape, which, to be frank, paints a grim picture about the state of markets going forward. Buried in those broadly pessimistic views, though, he actually singles outThis article was written byAlpha Mantra492 FollowersFollowI am a value focused investor, conducting fundamental research on sectors like but not limited to chemicals, homebuilders, building materials, industrials and metals & mining. I prefer to invest in stocks which are cheaply available and have a catalyst in the near future. My investment horizon ranges from a quarter to two years. I have over 3 years of active investing experience and served as buy side analyst at boutique research firm and family offices.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.