Lululemon Athletica: Extremely Overvalued Even In The Most Optimistic Scenarios
By Alex Shadunsky: I am not here to rain on Lululemon Athletica's (LULU) parade as the stock's run has been nothing short of impressive over the past year, but at this point the valuation look very extended, even in the most optimistic scenarios. All of the valuation metrics suggest that the stock is overvalued and even taking growth into consideration at current rates doesn't do much to change the investing outcome of the stock. To add to the bear case, the margins are contracting and the growth is slowing, not a good sign for a growth stock. Below is an in depth look at the valuation metrics and stock chart.Valuation: Lululemon Athletica's trailing 5 year valuation metrics suggest that the stock is overvalued as all of the metrics are above their respective 5 year averages. Lululemon Athletica's current P/B ratio is 18.5 and it has averaged 6.9 over the past 5 yearsComplete Story »
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