Lululemon faces structural headwinds from product quality issues, intensifying competition from Alo and Vuori, and shifting consumer preferences away from body-hugging styles that drove 20% legging sales decline in Q2. While new CEO Heidi O'Neill offers some turnaround optionality, current valuation at 16.5x P/FCF doesn't adequately compensate for execution risk and the difficulty of reversing the brand's momentum decline.
At post $99.01·Now $99.010.0% since postedas of Oct 23, 4:45 PM ET
What's the biggest value trap in the market right now,cheap on every metric, and still a bad buy?
Lululemon is a value trap despite trading at historically low multiples after a 55-60% decline. Revenue growth has stalled, China expansion is slowing, core customers are moving to competitors, and forward earnings estimates are continuously cut, making the cheap valuation misleading.
At post $94.34·Now $99.01+5.0% since postedas of Oct 23, 4:45 PM ET
LULU has cycled through volatility but is trading below conservative fair value of $200/share with no debt. The author is accumulating at $100, expecting a recovery.
At post $96.19·Now $99.01+2.9% since postedas of Oct 23, 4:45 PM ET
Don’t ever bet against hot Moms in stretch Pants $LULU
Lululemon is a hated but profitable company with strong brand power. The author is bullish based on product quality and consumer loyalty despite polarized market sentiment.
At post $100.30·Now $99.01-1.3% since postedas of Oct 23, 4:45 PM ET
Lululemon has become a prime private equity takeover target due to severe valuation compression (P/E 8-10x vs. historical highs), a fortress balance sheet with $1.3-1.4B cash and zero debt, and strong cash generation ($1B+ annual FCF). A PE-backed buyout is positioned as a highly viable long-term outcome that would unlock significant shareholder value.
At post $103.19·Now $99.01-4.0% since postedas of Oct 23, 4:45 PM ET
Despite terrible recent earnings, Lululemon trades at an attractive 9 P/E multiple that is cheap relative to size and brand moat. The company's dominant market position and consumer ubiquity suggest mean reversion potential, especially compared to peers like Colgate which command much higher valuations.
At post $103.19·Now $99.01-4.0% since postedas of Oct 23, 4:45 PM ET
Lululemon's store sales are declining despite tariff tailwinds, buyback programs, and new store openings, signaling consumer weakness and potential near-term downside.
At post $121.77·Now $99.01-18.7% since postedas of Oct 23, 4:45 PM ET
Lululemon trades at 9x PE despite strong 20%+ growth in China and 10% growth in rest of world markets, which comprise 30% of revenue. The incoming Nike-headhunted CEO and potential operational reshaping suggest the market is discounting shares too severely relative to peers like Gap or Under Armour.
At post $128.58·Now $99.01-23.0% since postedas of Oct 23, 4:45 PM ET
Author expects LULU to recover modestly into earnings (June 4) to sell covered shares at a slight loss and exit spreads via theta decay, with explicit lack of confidence in long-term stock recovery.
At post $126.76·Now $99.01-21.9% since postedas of Oct 23, 4:45 PM ET
I went to the mall and EVERY girls was dressed like a skank - LULU to the MOON
Author observed high demand for Lululemon apparel at the mall and is betting on a 2x move, suggesting strong consumer demand will drive stock appreciation.
At post $173.33·Now $99.01-42.9% since postedas of Oct 23, 4:45 PM ET