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Tue, May 13, 2025, 7:48 AM 2 min read
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We came across a bullish thesis on lululemon athletica inc. (LULU) on Value Investing Subreddit Page by FeedbackAlarmed5045. In this article, we will summarize the bulls’ thesis on LULU. lululemon athletica inc. (LULU)'s share was trading at $279.77 as of May 9th. LULU’s trailing and forward P/E were 19.11 and 18.38 respectively according to Yahoo Finance.
A store employee in an athletic apparel store restocking merchandise.
Lululemon (LULU) presents a compelling long-term opportunity, now trading at what appears to be a discount to its intrinsic value. The company boasts a strong competitive moat, evidenced by its ability to maintain premium pricing and cultivate an aspirational brand image that few rivals can match—selling $105 leggings without denting demand is a testament to this power. Its financials reinforce this strength, with superior margins and low operating costs compared to peers, along with steadily growing revenue and an upward trend in net income. Lululemon is also expanding beyond its core, targeting the men’s apparel segment and accelerating its international footprint, with recent filings showing notable gains in both areas. Concerns over tariffs may weigh on sentiment, but the company’s pricing power is likely to insulate it, enabling LULU to outperform weaker competitors in a strained environment. Backed by a healthy balance sheet and competent management, the business is well-positioned to not only endure external headwinds but emerge stronger. The recent stock pullback offered an attractive entry point, and the investment case hinges on a blend of brand dominance, financial discipline, and strategic growth initiatives. LULU's fundamentals suggest strong resilience and upside potential, making this a timely and strategic buy.
lululemon athletica inc. (LULU) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held LULU at the end of the fourth quarter which was 45 in the previous quarter. While we acknowledge the risk and potential of LULU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LULU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.
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