LULU
Lululemon Athletica Inc.$164.12
Buy
Target $238.88
Report: Feb 24, 2026Consumer Cyclical • Apparel Retail • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$164.12+45.6%
Rec: BuyConviction: High
Entry Target
$164.12
(0% above current)
Fair Value
$238.88
(46% above current)
Stop Loss
$156.64
(5% below current)
Position Size
Full
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$348.50
52 Week Low$156.64
Avg. 3 Month Volume3.08M
Efficiency
LTM Gross Margin56.6%
LTM EBITDA Margin24.6%
LTM EBIT Margin20.2%
LTM Operating Margin19.9%
LTM ROA20.1%
LTM ROE34.8%
LTM ROIC35.2%
LTM ROCE37.0%
Capital Structure
Market Cap (MM)$18.3B
Enterprise Value (MM)$18.3B
Shares Outstanding117.16M
Total Debt (MM)$1.80B
Cash & Equivalents (MM)$1.81B
LTM Net Debt (MM)$-8.76M
LTM Net Debt/EBITDA-0.0x
Growth
TTM Rev. Growth4.9%
Last 3-Yr Rev. CAGR11.0%
Last 3-Yr EBITDA CAGR19.0%
Last 3-Yr EPS CAGR25.6%
Valuation
Street Target Price$201.25
LTM EV/Revenue1.6x
LTM EV/Gross Profit2.9x
LTM EV/EBIT8.2x
LTM EV/EBITDA6.7x
LTM P/E11.6x
LTM EV/FCF19.8x
LTM P/FCF19.8x
LTM P/TB2.2x
LTM P/B3.7x
Dividend Yield0.0%
Payout Ratio0.0%
Executive SummarySituation: Current price is $164.12 versus fair value $238.88 (45.6% expected return), and valuation confidence is stable. Debate: Bull case depends on New CEO Announcement: The appointment of a permanent CEO with a strong track record in retail transformation will likely resolve the 'leadership vacuum' discount currently applied by the market. Bear case centers on Moat Erosion via Competitor Share Gains: Upstart brands like Vuori and Alo Yoga could permanently capture the Gen Z and Millennial demographic, leading to a structural decline in Lululemon's pricing power. Conclusion: Recommendation is Buy with Full sizing and Long-Term horizon.
Bull Case
The 'International Turbine' remains fully engaged, with China Mainland growing 28% and Rest of World growing 12%, providing a clear path to double-digit earnings growth as North America stabilizes. Furthermore, the 35.2% ROIC and $1.8 billion net cash position allow for massive, value-accretive buybacks at a distressed 11x P/E multiple.
Bear Case
Brand staleness in the U.S. is permanent, evidenced by three consecutive quarters of declining comparable sales, while rising competition from Alo and Vuori permanently impairs Lululemon's pricing power and full-price sell-through (currently 75%).
Key Catalysts
Near-Term (0-6 months)Impact: High
New CEO Announcement: The appointment of a permanent CEO with a strong track record in retail transformation will likely resolve the 'leader...
Mid-Term (6-18 months)Impact: High
Proxy Fight Resolution: A settlement or vote that grants board seats to Chip Wilson's nominees would signal a shift toward board declassific...
Long-Term (18+ months)Impact: Moderate
Lululemon is at a critical juncture as it trades near 3-year lows ($156.64) while simultaneously facing a contested leadership transition an...
Primary Risks
Concern: Medium
Moat Erosion via Competitor Share Gains: Upstart brands like Vuori and Alo Yoga could permanently capture the Gen Z and Millennial demograph...
Concern: High
Tariff and Supply Chain Pressure: Continued reliance on Southeast Asian manufacturing (39% Vietnam) and Chinese fabrics (19%) exposes the co...
Concern: Medium
The governance situation is in a state of flux with three potential outcomes: 1. Status Quo: The interim co-CEOs execute the current plan, l...
Recent Activity
2025-12-12SEC Filing (8-K)
+9.60%Lululemon reports Q3 FY2025 results with 7% revenue growth
2025-10-21SEC Filing (8-K)
+5.20%Lululemon enters $600M credit facility with Bank of America
2025-09-05SEC Filing (8-K)
-18.58%Lululemon reports Q2 FY2025 results with 7% revenue growth
2025-06-06SEC Filing (8-K)
-19.80%Lululemon reports Q1 FY2025 results with 7% revenue growth
2025-03-28SEC Filing (8-K)
-14.19%lululemon reports Q4 and FY 2024 results with 13% revenue growth and $14.64 EPS
Valuation Table
9.5/10Decision Grade
Scenario Range
$247
Bear
$329
Base
$423
Bull
$164