Lululemon Athletica Inc. (LULU) Fair Value & PE Analysis
Apparel - Retail · NASDAQ
Current Price
$119.03
PE Ratio (TTM)
9.6x
Intrinsic Value
$143.58
+17.1% margin of safety
What Is Lululemon Athletica Inc.'s Fair Value?
As of 2026-07-29, applying a 9.0x earnings multiple to Lululemon Athletica Inc.'s (LULU) earnings per share of $12.65 yields a fair value estimate of $143.58 per share, versus a market price of $119.03.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $105.54 to $188.09. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How the PE model works · Recalculate in PE mode · LULU intrinsic value (DCF view)
Is Lululemon Athletica Inc. (LULU) Overvalued?
At $119.03, LULU trades about 17.1% below its PE-based fair value estimate, a modest discount to its earnings power, though not enough to call it cheap outright.
COMPETITIVE MOAT
↑Strong Brand Loyalty and Community
Lululemon cultivates a dedicated customer base through its premium brand image and community-focused initiatives. This fosters repeat purchases and brand advocacy.
↑Product Innovation and Quality
The company's focus on high-quality, innovative athletic wear creates a perception of superior performance. This justifies premium pricing and differentiates it from competitors.
↑Direct-to-Consumer (DTC) Expertise
Lululemon's robust DTC channel allows for greater control over customer experience and data. This builds stronger relationships and higher margins.
INVESTMENT RISKS
↓Intensifying Competition in Athleisure
The athleisure market is highly competitive, with numerous brands vying for market share. Lululemon faces pressure from both established players and emerging niche brands.
↓Macroeconomic Headwinds and Consumer Spending
Economic downturns and reduced consumer discretionary spending can negatively impact sales of premium-priced apparel. This is a significant factor affecting the entire retail sector.
↓Supply Chain Disruptions and Cost Inflation
Global supply chain issues and rising input costs can affect product availability and profitability. This requires careful management to maintain margins and meet demand.
Base case
LULU base case PE valuation
Intrinsic Value
$143.58
Margin of safety
+17.1%
Expected annual return
+3.8%
Base case assumptions: 4.7% annual earnings growth, 9x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the LULU PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Lululemon Athletica Inc. respond.
Open PE Calculator for LULUCompany Overview
Lululemon Athletica Inc., alongside its subsidiaries, specializes in the design, global distribution, and retail of athletic apparel and accessories for both women and men. Its business operations are structured into two main divisions: company-owned retail establishments and direct-to-consumer sales. The firm's offerings encompass a range of clothing such as pants, shorts, tops, and jackets, all crafted for promoting a healthy lifestyle and facilitating athletic endeavors. These activities span yoga, running, training, and other physically demanding pursuits. Beyond apparel, Lululemon also supplies fitness-related accessories and a selection of footwear. Customers can acquire Lululemon products through numerous channels. These include a global network of corporate-managed stores, outlet locations, and seasonal warehouse sales. The company also sells through an interactive digital workout platform and via wholesale partnerships with entities like yoga studios, health clubs, and fitness centers. Further sales occur through temporary pop-up shops, as well as various licensing and supply agreements. A significant portion of sales is conducted directly with consumers through dedicated mobile applications and its primary e-commerce website, lululemon.com. By January 30, 2022, Lululemon boasted 574 stores operating under its brand name across numerous international markets. These markets span 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. Founded in 1998, Lululemon Athletica Inc. maintains its corporate base in Vancouver, Canada.
Financial Metrics — LULU PE Stock Valuation Data
PE Ratio (TTM)
9.6x
PEG Ratio
n/m
Earnings Yield
10.63%
ROE (TTM)
31.3%
Revenue/Share (TTM)
$97.07
Debt/Equity
0.44x
Frequently Asked Questions
What is the PE ratio of LULU?
The trailing twelve-month PE ratio of LULU reflects how much investors pay per dollar of Lululemon Athletica Inc.'s earnings. This metric is most useful when compared to Apparel - Retail peers and the company's own historical range.
Is LULU overvalued based on PE ratio?
LULU's PE of 9.6x combined with a PEG ratio of -0.59 provides a growth-adjusted perspective. LULU has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Apparel - Retail, a DCF analysis may be more appropriate.
How do I value LULU stock using PE ratio?
To value Lululemon Athletica Inc. using PE: (1) Compare the current PE (9.6x) against the Apparel - Retail median to assess relative pricing, (2) check the PEG ratio (-0.59) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of LULU?
LULU's PEG ratio is -0.59, calculated by dividing the PE ratio (9.6x) by the expected earnings growth rate. Because LULU has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for LULU stock valuation?
PE ratio gives a quick relative read — how LULU is priced versus Apparel - Retail peers. DCF provides an absolute value based on projected free cash flows. For LULU, with a strong ROE of 31.3%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See LULU DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Cyclical valuationsP/E and DCF value LULU with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.