The stock of Lululemon Athletica (LULU) hit a 52-week low on May 11 as investors stay on the sidelines and wait for the company’s turnaround plan to take hold.
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LULU stock was down 3% at midday and trading at a fresh 52-week low of $127.06 per share. The stock has fallen 22% in the last month after the athletic apparel retailer issued financial results and forward guidance that underwhelmed analysts and investors.
Lululemon’s share price is now down nearly 60% over the past year as the company struggles with a myriad of problems. The stock is trading at price-to-earnings multiple of only 9.95, which is cheap compared to other U.S. equities.
Lululemon’s Many Problems
Lululemon’s stock is sinking as the company struggles with many problems. These include declining sales, tariff impacts, and poorly executed product launches. The company recently announced a new CEO and board members as it executes a multiyear turnaround strategy, but the new appointments have been poorly received on Wall Street.
The company is also dealing with activist investor Elliott Management, which has built a sizable stake in Lululemon, and an ongoing public feud with founder Chip Wilson who has publicly criticized many of the board of directors’ decisions in recent years.
Is LULU Stock a Buy?
Lululemon Athletica’s stock has a consensus Hold rating among 20 Wall Street analysts. That rating is based on one Buy and 19 Hold recommendations issued in the last three months. The average LULU price target of $177.29 implies 40% upside from current levels.
