Lululemon Athletica Inc. (LULU) Stock Is Gearing Up For A Significant Breakout

The price of Lululemon Athletica Inc. (NASDAQ:LULU) stock ended December 25, 2019 trading at $229.03 which saw downtrend of 88.33% since the beginning of 2019. For most investors, the 0.39% rally in the share price could have prompted them to buy the stock, but doing that would be a mistake as it would be taking into consideration only the short-term performance of the stock.

A look at the LULU stock today shows that it has gained 102.22% of its value over the past one year, which has led to some investors becoming excited about the short-term performance of Lululemon Athletica Inc. (NASDAQ:LULU). If we turn to the stock analysts in general, they revealed that most of them are still bullish about the chances of the shares. The consensus rating from analysts for Lululemon Athletica Inc. (LULU) is 2.1 which is a ,neutral rating. Over the past week, the stock has been rated as a Buy 14 times while it has been rated as a Hold 10 times. The 52-week high price for LULU is $235.5 which is attained on December 11 while its 52-week low currently stands at $110.71 and was reached on December 26. At the moment, the stock is trading $49.48 above its YTD moving average set at $179.55.

Moving on, Lululemon Athletica Inc. (LULU) last released its earnings for the October 2019 quarter of the fiscal year. The company performed decently over the past three months, with its earnings up 35% year-over-year at $0.96. The company brought a surprise of 3 as analysts were predicting $0.93 per share. The revenue generated by Lululemon Athletica Inc. in the October 2019 quarter surged by 23% to reach $916.14 million. This is high compared to the $747.66 million it recorded in the same quarter last year. To see what traders should watch in its January 2020 financial results, analysts have consensus earnings per share of $2.14 which is higher than the $1.85 recorded in the same quarter a year ago. Over the next 12 months, the earnings per share are expected to move by 18.55%. If it achieves that, then the company firmly believes that its long-term annual earnings growth rate target set at 20.68 % could be achieved. The company has also recorded a revenue of $3.75 billion over the past 12 months.

In order to determine if the stock is worthy of your patience, you should know that Lululemon Athletica Inc. (NASDAQ:LULU) is now trading at 52.99X the earnings per share recorded over the past 12 months. This is an uptrend compared to the readings of the sector which is 25.26X while the industry average stands at 46.34X. The most popular way to value a stock is to look at its historic Price-to-Earnings (P/E) ratio with the help of its earnings report over the past 12 months. Lululemon Athletica Inc. was able to achieve an EPS of $4.32 during the last four quarters. The P/E ratio is widely known due to the fact that it is widely used, simple, effective, and, tautologically.

On Wednesday, December 25 of 2019, the 14-day Absolute ATR (Average True Range) for LULU moved by $4.74. Over the past seven days, the stock’s average daily volatility stood at 1.54%. A stock with a low volatility is usually a good one as it means that investors are very confident in the stock. Lululemon Athletica Inc.’s trading volume has recently moved to 613.56 thousand, which is compared with the average daily volume of 1.93 million shares.

The daily chart for LULU, points out that the company has recorded 29.17% gains over the past six months. However, it is still 106.87% higher than its most recent low trading price. The performance of the stock over the past five days shows that it is up 2.71% though it is 1.1% above its three-week moving average. It is worthy to know that price action is not always clear. There are times when a stock will undergo some negatives, trade erratically within some range or even act very unpredictable. When that happens, then making use of moving averages makes the pattern clearer for traders. Comparing to 50-day SMA, the price of the stock has surged by 6.54% while it is up 22.28% against the 200-day SMA. This is usually seen as the last support line for a stock, as a move downward could signal a bearish trend or market. The daily chart of LULU reveals that it has gained some grounds as it ended Wednesday with a 4.15% rise over the past 30 days.