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Featured Story from MarketBeat
Lululemon Stock Trades at 2018 Levels Despite Record Revenue: Time to Buy?By Sam Quirke. Originally Published: 4/15/2026. 
Key Points
- Lululemon is down nearly 70% from its all-time high but is starting to stabilize after a recent bounce.
- A compressed P/E ratio of 12 and decent underlying performance are creating an attractive risk/reward setup.
- Even neutral-rated analysts have price targets that imply meaningful upside, suggesting the stock may be heavily oversold at current levels.
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Shares of athleisure giant Lululemon Athletica Inc (NASDAQ: LULU) are trading just above $160 — up more than 10% from the multi-year lows set in late March. While that bounce is encouraging, it hasn’t changed the bigger picture: the stock remains roughly 28% below its December highs and nearly 70% beneath its all-time peak, making it one of the more painful holds in the retail and apparel space over the past couple of years. For investors who rode that selloff, the pain is understandable. For those on the sidelines, however, the setup looks more interesting. Let’s take a closer look at why this could be a compelling buying opportunity. A Sharp Decline That Might Have Gone Too Far
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Lululemon’s selloff has been driven largely by fading confidence in its growth trajectory, especially in North America. What was once a steady engine of expansion has slowed, raising concerns about market saturation and shifting consumer preferences. At the same time, the broader narrative around premium consumer brands has become more challenging. Investors are less willing to pay up for growth when that growth is decelerating. That shift in sentiment has compressed Lululemon’s valuation over the past year, sending shares to new lows even as earnings stayed solid. In effect, the stock went from being priced for perfection at the end of 2023 to trading at roughly 2018 levels while the company continued to print record revenues. In addition, rising competition in the athleisure market and evolving consumer tastes have pressured the brand. For a company that once disrupted the category, it’s now experiencing what it’s like to be disrupted. The Business Is Holding Up Better Than the StockDespite the weak share price, the underlying business hasn’t deteriorated nearly as much. Lululemon has consistently delivered solid results and has generally topped analyst expectations. That was true in December and again last month, when the company reported record quarterly revenue. There’s also growing evidence that the company’s 2026 Action Plan is gaining traction. Management is focused on reaccelerating North American growth through product innovation, faster development cycles, and operational improvements aimed at winning back high-value customers. Meanwhile, international markets provide an important offset. Growth in China remains strong, and the company’s push into India represents another potential long-term growth driver. This diversification reduces reliance on North America and supports a more balanced growth profile. Taken together, these factors suggest that while the stock and valuation are under pressure, the fundamentals are far from broken. Valuation and Analyst Targets Highlight the OpportunityThe gap between price and fundamentals is evident in Lululemon’s valuation. The stock trades at a price-to-earnings ratio of about 12x — near its lowest level in years and well below the roughly 18x multiple seen a year ago. For a company still delivering record revenue while its stock sits at 2018 levels, the case that the shares have been oversold is strong. Recent analyst updates underscore this point. JPMorgan Chase and Robert W. Baird are two firms that have maintained Neutral or equivalent ratings recently, yet their price targets of $196 and $190, respectively, sit well above LULU’s current price of about $160. Based on those Neutral targets alone, there’s roughly 20%–22% of upside from current levels. That makes for an unusual setup: when even cautious analysts maintain price targets implying material upside, it suggests the market may be overly pessimistic. Early Signs of a Bottom, But Risks RemainThe recent bounce off multi-year lows indicates selling pressure may be easing. While it’s still early, that kind of price action can mark the initial stages of a bottom, particularly when paired with stable fundamentals and improving sentiment. This is not a risk-free trade. The stock remains in a downtrend, and reversing that trend will require more than a short-term rally. Lululemon must continue to deliver strong quarterly results and rebuild investor confidence that its turnaround is gaining traction. If management can achieve that in the coming months, momentum could build quickly. For investors eyeing the potential ground floor of a recovery, this is often what it looks like. |
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