Lululemon Stock Price Is Running to a New All-Time High

Lululemon (NASDAQ: LULU) stock price rallied more than 50% this year, extending the three-year upside momentum to 220%. The shares have breached $200 mark at the beginning of last month and notched an all-time high of $204 a share.

The stock price is currently trading slightly below $200 level. Fortunately, its stock is likely to bounce back. This is because of the higher price targets and strong future fundamentals. Several catalysts are supporting the upside momentum.

LULU Lululemon Athletica Inc. daily Stock Chart

Analysts Are Optimistic

Market analysts are showing confidence in Lululemon stock price upside potential. For instance, Piper Jaffray provides an Overweight rating with a price target of $227.

Piper Jaffray said, “We see the brand as a share gainer in a secularly growing category with accelerating opportunity in men’s and international. While shares are close to their 52-week high and investors expect on-going DD growth in women’s and steady mix shift to higher-margin digital.”

The firm claims strong performance in China. The strengthening profitability in Europe is adding to its growth prospects. The recently launched loyalty program adoption is among the catalysts.

Cowen analyst John Kernan believes Lululemon’s stock price is set to trade around $235 by the end of this year. The analyst says LULU’s strategy of capitalizing opportunities in emerging markets would help in generating sustainable growth in financial numbers.

Future Fundamentals Are Strong

The company appears in a position to generate sustainable growth in financial numbers. Its revenue grew 22% year over year in the latest quarter while comparable sales increased 15%. In addition, the company generated 25% year over year growth in net income. It has repurchased close 9.6 thousand shares in the latest quarter.

The company expects to generate double-digit growth in revenues and high double-digit growth in earnings per share for the full year. Strong financial outlook clearly reflects the success of its business strategies. Therefore, Lululemon’s stock price is likely to extend the upside momentum.

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.

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