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Will LULU Stock Sustain The Breakout And Lead To the $500 Mark?

  • LULU stock is facing selling pressure from higher levels.
  • Lululemon Athletica Inc.’s revenue has consistently advanced for the last five years.

Lululemon Athletic Inc. is also known as Lululemon founded in the year 1998 by Chip Wilson in Vancouver. The company has its headquarters situated in British Columbia. The company operates in the retail industry and serves more than 655 locations. Lululemon has more than 34K employees as of Jan 2023.

The EPS for the stock is $7.90 which means that the company is making 7.90 USD on each share. Also, the average trading volume of the LULU stock in the last ten days is 5.577M.

The market cap of LULU stock is $52.228B and the company does not pay any dividend to its shareholders. The total number of shares floating in the market of LULU stock is 110.414M. Out of this 9.07% of shares are closely held by the investors.

The current ROE of Lululemon Athletica Inc. is 30.89% and the debt/equity ratio of the company is 33.78%. The company has a very good PB ratio of 14.25 which indicates that the investors have higher expectations from the stock.

Financial Performance For LULU Stock

Source: Tradingview

The revenue of Lululemon Athletica Inc. has consistently advanced for the last five years. This started to rise from the year 2018 resulting in $3.29B to $8.11B in the year 2022. The reported profit of Lululemon for the year 2022 is 10.54% resulting in $854.80M.

LULU Stock Showing Signs Of Weakness, Will It Fail The Breakout?

LULU by TradingView.com

The share price of LULU stock has been of a very volatile nature making random highs and lows leading to higher levels. Recently the LULU stock price broke out above the consolidation zone but failed to sustain above the zone. 

The share price is currently forming bearish candlesticks leading to a decline in the price of the stock. The price also is forming a lower low structure and if it breaks below the level of $388.00 it can lead to further lower levels.

The stock price of LULU is trading above the 50-day and the 200-day EMA following a golden cross. The RSI is also trading above the 50-level and is currently above the 14-day SMA line. 

Conclusion

Lululemon Athletica Inc. has reliable financials and they support the company for future growth. Also, the PB ratio of the company is high, which makes the company’s share a good candidate for future growth.

The technical chart on the other hand is showing weakness on the charts. This is because the LULU stock is making lower lows and is declining from the highs. If the share price breaks below the level of $388.00 we might get to see a good decline in the price of the stock.

Technical Levels
  • Support levels– $328.00 and $354.50
  • Resistance levels– $420.00 and $478.00
Disclaimer

The information provided in this article, including the views and opinions expressed by the author or any individuals mentioned, is intended for informational purposes only. It is important to note that the article does not provide financial or investment advice. Investing or trading in cryptocurrency assets carries inherent risks and can result in financial loss.

Alena

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