Getting ready for the run!

8월 22일

- LULU is getting ready for the reversal run!
- beaten down name YTD, cheapest valuation in a decade.
- international expansion will work out in the long run despite creating capex headwins in the shorter timeframe

9월 5일

노트

- For LULU, Technicals were aligning but fundamentals haven't bottomed yet. Company is struggling with assortments mix i.e existing products are not refreshing enough for buyers.

- There could be more reasons for softness in demand in the US because of competition like ALO or consumer is actually weak and isn't spending hundreds for clothing.

- SIlverlining, their international expansion is working especially in China. I believe it's because LULU being an international brand has some brand value in Asia like china whereas American consumers have more option or their tastes have changed.

- For US consumers, they gotta experiment if giving discounts brings back customers if so then margin compression or if they refresh their product cycle which stimulate the demand organically.

9월 5일

노트

- As for my fair value, my fair value where I wanted to originally add was a yellow line in the chart which is around $165

9월 5일

노트

Financials for LULU

year | 2025 | 2026 | 2027 | 2028
EPS | 13.98 | 14.66 | 15.29 | 17.88
EPS% | -2.57% | 4.88% | 4.29% | 16.94%

For such a low eps growth but with some brand value. fair forward p/e is 10

Fair stock value:
year | 2025 | 2026 | 2027 | 2028
EPS | 13.98 | 14.66 | 15.29 | 17.88
price | 139 | 146 | 152 | 178

9월 5일

노트

Does LULU have a turn around story?

- I would say yes, they gotta focus on capturing international markets so that their TAM remains huge and propeller of growth in the years ahead.

9월 6일

노트

- If LULU C- suite is smart then they should consider buying back stock as much as they can. This will boost the EPS significantly and hopefully sustain 15% per year.

- In that scenario, we could assign a forward multiple of 15 and fair value becomes:

year | 2025 | 2026 | 2027 | 2028
EPS | 13.98 | 16 | 18.4 | 21.16
price | $209 | $240 | $276 | $317