Lululemon Athletica Inc. (LULU): Today's Featured Consumer Non-Durables Laggard
Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model .
Lululemon Athletica ( LULU) pushed the Consumer Non-Durables industry lower today making it today's featured Consumer Non-Durables laggard. The industry as a whole closed the day up 0.1%. By the end of trading, Lululemon Athletica fell $1.46 (-2.1%) to $68.05 on light volume. Throughout the day, 1.4 million shares of Lululemon Athletica exchanged hands as compared to its average daily volume of 2.4 million shares. The stock ranged in price between $68-$70.16 after having opened the day at $69.82 as compared to the previous trading day's close of $69.51. Other companies within the Consumer Non-Durables industry that declined today were: Tandy Brands Accessories ( TBAC), down 5.5%, CTI Industries Corporation ( CTIB), down 4.2%, Standard Register Company ( SR), down 3.5%, and Ever-Glory International Group ( EVK), down 3.2%.
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lululemon athletica inc., together with its subsidiaries, designs, manufactures, and distributes athletic apparel for women, men, and female youth. Lululemon Athletica has a market cap of $7.73 billion and is part of the consumer goods sector. The company has a P/E ratio of 42.7, above the S&P 500 P/E ratio of 17.7. Shares are down 8.8% year to date as of the close of trading on Wednesday. Currently there are 11 analysts that rate Lululemon Athletica a buy, three analysts rate it a sell, and six rate it a hold.
TheStreet Ratings rates Lululemon Athletica as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the consumer non-durables industry could consider Consumer Staples Select Sector SPDR ( XLP) while those bearish on the consumer non-durables industry could consider ProShares Ultra Sht Consumer Goods ( SZK).
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