Short Bets Getting Lower For Lululemon Athletica Inc. (LULU)

Short sellers are getting bullish about Lululemon Athletica Inc. (NASDAQ:LULU). Looking at the sentiment indicator for the LULU stock we see that the short-interest ratio is at 1.851124 while the average analyst recommendations at 2 suggests buying these shares. Between December 14 and December 31, the total number of shorted shares amounted to 5.33 million shares. That was 8.42% less than the total of 5.82 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go up. Average daily volume for Lululemon Athletica Inc. at the December 31st settlement plunged to 2,880,356, as compared to 4,419,895 at the December 14th report. That brought days to cover to a 40.53% increase from the 1.317208 days to cover recorded at the prior short interest data release.

Lululemon Athletica Inc. (LULU) will probably climb 22.83 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $200price as 12-month high target. This represents a whopping 51.96 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $165, which represents a return potential of 25.37 percent when compared to the closing price of the stock of $131.61 on Thursday, January 10. The lowest price target for the stock is $77 — slightly more than -41.49 percent from LULU’s current share price.

The stock is currently hovering around the first support level of $129.94. Below this, the next support is placed in the zone of $128.26. Till the time, the LULU stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 55.55 on daily chart, which may remain a cause for concern. If the price breaks below $128.26 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $132.85 mark may result into a pull-back move towards $134.08 level.

On 10th of January, Lululemon Athletica Inc. (NASDAQ:LULU) shares ended lower after a volatile session. The shares dropped -4.39 points or -3.23 percent at $131.61 with a heavy trade volume of 3.396 million shares. After opening the session at $131.03, the shares went as high as $132.41 and as low as $129.5, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $16.7 billion and now has 127.05 million shares outstanding. Lululemon Athletica Inc. (LULU) stock has gained 14.43 percent of market value in 21 trading days.

LULU stock has a trailing 3-year beta of 0.36, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $3.33 a share in the trailing twelve months. The stock’s value has surged 8.22 percent year to date (YTD) against a rise of 65.53 percent in 12 month’s time. The company’s shares still trade -20.13 percent away from its 1-year high of $164.79 and 75.71 percent up from 52-week low of $74.90. The average consensus rating on the company is 2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a buy.

Shares of Lululemon Athletica Inc. (LULU) are trading at a P/E ratio of 40.67 times earnings reported for the past 12 months. The industry LULU operates in has an average P/E of 40.11. Its P/E ratio went as low as 23.87X and as high as 39.99 over the 5-year span. Further, it is sporting a 5.48 on the Price-to-Sales ratio. Compare this with the industry average P/S of 6.48. 54.8 percent is the gross profit margin for Lululemon Athletica Inc. and operating margin sits at 20.7 percent. Along with this, the net profit margin is 12.6 percent.

Let’s take a look at some insider activity at Lululemon Athletica Inc. (NASDAQ:LULU) and see the pattern. The earliest insider trade took place on 06/07/2018. Mussafer David M parted with a total of 17.94 thousand shares of company at average share price of $121. The total for the sales was set at $2.17 million. After this transaction, the Director account balance stood at 36.33 thousand shares. The stock grew 8.77 percent since that insider sale. On 06/07/2018, Advent International Corp/Ma, 10% Owner, sold 10 million shares at a price per share of $121. This removed 1210 million shares from the insider’s fortune and the stock saw a 8.77 percent rally in value since the news became public. This transaction left 10.11 million shares in the 10% Owner account.

On 06/07/2018, 10% Owner Advent International Corp/Ma performed a sale transaction worth $1210 million. This sale at $121 each has eliminated 10 million shares from the insider’s portfolio position. Meanwhile, shares have recorded 8.77 percent increase since the transaction was reported. The insider now is left with 10.11 million shares remaining in the account. Advent International Corp/Ma, who performs the 10% Owner job, sold 10 million shares for $1210 million. The disposal occurred on 06/07/2018 was priced at $121 per share. The share price soared 8.77 percent since the reporting date. Advent International Corp/Ma now left with a stake of 10.11 million LULU stock worth $1329.96 million after the insider selling.