Stock Analysis & Ideas

All Eyes on Lululemon’s (NASDAQ:LULU) Q2 Results

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Data from TipRanks’ Website Traffic Tool hints that Lululemon Athletica could impress its stakeholders with a solid Q2 show.

Athletic wear company Lululemon Athletica Inc. (NASDAQ:LULU) is scheduled to release its second-quarter results after the market closes on September 1. Data from TipRanks’ Website Traffic Tool suggests that the company is likely to report a decent quarter.

LULU stock, which has lost 20.7% so far this year, recently gained momentum. It has grown more than 5% in the last three months. Now, it remains to be seen how the upcoming results will boost the shares of Lululemon Athletica.

What Does Lululemon Do?

Headquartered in the Canadian city of Vancouver, Lululemon manufactures and sells athletic clothing, footwear and accessories. The company has 570 stores spread across 17 nations and a workforce of more than 25,000 people.

Website Traffic Hints at a Strong Q2 Show

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE:SEMR), the world’s biggest website usage monitoring service, offers insight into Lululemon’s second-quarter performance.

According to the tool, LULU’s website traffic registered a 42.2% rise in global visits during the second quarter, compared to the first quarter. While website visits on the desktop declined 5.7% quarter-over-quarter, an 82.1% surge in traffic to the company’s mobile app made up for the loss. Learn how Website Traffic can help you research your favorite stocks.

The tool’s data is in line with the Street’s earnings expectation of $1.86 per share, compared to $1.65 reported in the corresponding quarter last year. Meanwhile, LULU expects adjusted EPS to lie between $1.82 and $1.87 and revenues to range from $1.750 billion to $1.775 billion in the second quarter of 2022.

However, ahead of the quarterly results, Randal Konik of Jefferies (NYSE:JEF) downgraded the rating on LULU stock to Sell from Hold on the belief that Lululemon Athletica will have to lower “its long-term projections in the coming quarters as competition rises, end markets weaken.”

“It is clear macro issues are more severe across Europe and in Asia than in the U.S. which could pressure LULU’s ability to meet lofty projections,” the analyst said in a note to investors. Konik has provided a price target of $200 (35% downside potential) on Lululemon stock.

On August 26, William Blair analyst Sharon Zackfia reiterated an Outperform rating on LULU but refrained from offering a price target. The analyst expects the company to report solid second-quarter results.

Is LULU a Good Stock to Buy?

On TipRanks, Konik is the only analyst with a Sell rating on the stock. Fifteen analysts have a Buy rating on LULU stock, and six analysts want to Hold the stock. LULU’s average price target of $372.57 implies 21.2% upside potential.

Additionally, LULU stock scores a “Perfect 10” on TipRanks’ Smart Score rating system, suggesting that it has strong potential to outperform market expectations. Hedge funds and corporate insiders are also bullish on Lululemon and have increased their stakes in the company in the last three months. Finally, financial bloggers are 80% Bullish on the stock, compared to the sector average of 64%.

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