Q: Is this a good entry point for LULU?
5i Research Answer:
We think LULU’s current valuation is the most attractive in years, LULU is trading at 19.4x Forward P/E compared to historical averages that were as high as 47x. The slowdown in revenue growth was driven largely by macro factors due to a slowdown in consumer spending, and we think LULU still has a very long runway to grow, especially in the international market, where it is still early days for LULU’s business to expand. LULU stock has seen large drawdowns in the past, and has always recovered (of course, no guarantees). We like it here, if investors can ignore some short term weakness and focus on the company's (excellent) execution over the past 20 years instead.