Apparel - Retail · NASDAQ
Current Price
$138.16
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Lululemon Athletica Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
lululemon athletica inc., together with its subsidiaries, designs, distributes, and retails athletic apparel and accessories for women and men. It operates in two segments, Company-Operated Stores and Direct to Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle and athletic activities, such as yoga, running, and training, as well as other sweaty pursuits. It also provides fitness-related accessories and footwear. The company sells its products through a chain of company-operated stores; outlets and warehouse sales; interactive workout platform; a network of wholesale accounts, such as yoga studios, health clubs, and fitness centers; temporary locations; and license and supply arrangements, as well as directly to consumer through mobile apps and lululemon.com e-commerce website. As of January 30, 2022, it operated 574 company-operated stores under the lululemon brand in the United States, Canada, the People's Republic of China, Australia, the United Kingdom, Japan, New Zealand, Germany, South Korea, Singapore, France, Malaysia, Sweden, Ireland, the Netherlands, Norway, and Switzerland. lululemon athletica inc. was founded in 1998 and is based in Vancouver, Canada.
ROIC (TTM)
22.6%
ROE (TTM)
34.8%
FCF Yield
5.69%
Based on trailing twelve-month data, LULU shows a free cash flow per share of N/A and a ROIC of 22.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 5.69% are important context metrics when evaluating LULU's stock valuation relative to peers.
The intrinsic value of LULU depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether LULU is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $138.16. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Lululemon Athletica Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Apparel - Retail industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting LULU's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Lululemon Athletica Inc., this means projecting how much free cash flow the Apparel - Retail will produce over the next 5-10 years, then discounting those amounts to today's dollars. LULU's ROIC of 22.6% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For LULU, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
