Top 3 Reasons Why Lululemon Stock Is A Smart Investment Right Now
Lululemon Stock: A Promising Investment
At this price, it's time to stock up. Hot tech stocks usually generate the most buzz on Wall Street. But they aren't always the best picks. Yes, the stocks that have delivered the most gains over the past few decades have been predominantly tech stocks, like Amazon and Apple. But they've also been the victims of blowups and buyouts. In other words, they're risky, and they often come with a high risk vs. reward proposition.
Investing in Consumer Goods
- Strong consumer goods companies are excellent candidates for stock picks that can provide high growth potential without adding high risk.
- Over the past few years, Lululemon Athletica (NASDAQ: LULU) has demonstrated that it's running an exceptional business, and its stock has outperformed the market by a wide margin.
- It's still a growth engine, and it offers some serious benefits for investors.
Lululemon has built up a community of shoppers who pay up for its patented fabrics and workout-inspired designs. While it has fostered this community over time with features like in-store classes and products that fit a fitness-focused lifestyle, it launched a membership program this year that has already attracted 17 million members.
Should you invest $1,000 in Lululemon Athletica right now?
Highly Profitable Company
- It's not only sales that are up, but Lululemon reliably spins sales into profits.
- Adjusted earnings per share (EPS) increased from $10.07 in 2022 to $12.77 in 2023.
Its core market is growing
- Athleisure has been growing in popularity for a while, but it really took off when the work-from-home trend exploded early in the pandemic. Even though office wear is now returning, athleisure isn't going anywhere.
- It's actually still growing, and it's expected to increase at a compound annual growth rate of 9.3% through 2030, according to Grandview Research.
After the fall, Lululemon stock trades at 33 times trailing-12-month earnings, or close to its cheapest valuation in more than five years. Lululemon is a great pick for a solid stock that should reward shareholders for decades.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.