Last week saw the newest full-year earnings release from Lululemon Athletica Inc. (NASDAQ:LULU), an important milestone in the company's journey to build a stronger business. Results look mixed - while revenue fell marginally short of analyst estimates at US$4.1b, statutory earnings were in line with expectations, at US$4.50 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the 30 analysts covering Lululemon Athletica are now predicting revenues of US$5.44b in 2022. If met, this would reflect a major 34% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 56% to US$6.66. Before this earnings report, the analysts had been forecasting revenues of US$5.42b and earnings per share (EPS) of US$6.67 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$382, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Lululemon Athletica, with the most bullish analyst valuing it at US$478 and the most bearish at US$159 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Lululemon Athletica's growth to accelerate, with the forecast 34% annualised growth to the end of 2022 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Lululemon Athletica is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Lululemon Athletica going out to 2026, and you can see them free on our platform here.
We also provide an overview of the Lululemon Athletica Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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