If penny stocks attract you, consider leveraging TipRanks Penny Stocks Screener to zoom in on those with a higher possibility of beating the benchmark index. Using the Screener, we shortlisted Lulu’s Fashion Lounge Holdings (NASDAQ:LVLU) stock with an Outperform Smart Score on TipRanks. Further, analysts’ price targets show solid upside potential.
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Here’s What Makes Lulu’s Fashion Stock Attractive
Lulu’s fashion stock lost about 50% of its value year-to-date. This decline reflects the overall normalization in the e-commerce spending trends amid economic reopening and macro challenges. However, what stands out for this online retailer of women’s apparel, footwear, and accessories, is the ongoing momentum in its core business.
Despite challenges, Lulu’s revenue continues to grow at a double-digit rate. It increased by 27% in Q2, reflecting strong demand and growth in its active customer base and order value.
Its active customer base reached 3.2 million in Q2, up 52.6% year-over-year. Meanwhile, the average order value grew by 13.2%.
LVLU’s management is confident about the company’s long-term prospects. Its CEO, David McCreight, expects the company’s strong balance sheet and strategic initiatives to help it navigate the weak macro environment.
Meanwhile, for Fiscal 2022, LVLU expects its revenues to increase by 17.1% to 27.8% year-over-year.
Is LVLU a Good Stock to Buy?
On TipRanks, LVLU stock commands a Strong Buy consensus rating based on six Buy and one Hold recommendations. Further, the average price target of $13 implies 161.6% upside potential.
While 3.4% of investors holding portfolios on TipRanks have lowered their exposure to LVLU stock in one month on macro weakness, it sports an Outperform Smart Score of nine out of 10.
Bottom Line
LVLU’s strong performance amid multiple headwinds (like normalization in e-commerce spending, supply challenges, and inflation) supports the bull case for the stock. However, the company is not immune to weak macro headwinds, and its stock could witness pressure in the short term.
Moreover, before investing in a penny stock, I recommend investors learn more about them here: Are Penny Stocks a Good Investment?
