Would I buy Lululemon on the drop it had today?

Would I buy Lululemon on the drop it had today?

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Lululemon dropped 23% today based on their earnings and coming year forecast.

I love their pants/tops etc ! I am a believer in investing what you know! I shelled out an outrageous amount of money for leggings and workout tops and I normally wouldn’t! It wasn’t even on sale! And currently I don’t even work out that often – so a brand that made me shell out cash is definitely worth looking into.

The quality of the tights and top is the best I have seen in workout gear. It is also considered a life style brand and almost has a cult like following. They are expanding in places like China and they are in huge demand there (based on what I have read about them today). So I have a positive bias toward this company.

Based on their results and forecast for the upcoming year – many analysts downgraded the stock from buy to hold. This also contributed to the one day drop. I don’t always believe in following majority analyst sentiments so I did some searching on my own.

Most analysts/portfolio managers tend to have a negative view on the stock – expensive, implementation of strategy poor etc :

Lululemon CEO

Lululemon Shares Drop

There were some positive reviews of the results as well:

Lululemon Investors Need To Take A Deep Breath

Lululemon CEO discusses the results on Jim Cramer’s Show:

Lululemon CEO Stock Buyback

Cramer seems to have a good view of the stock as well.

Some points I like about this company:

  • No debt
  • Low beta
  • Small short of float ratio
  • The current price is at a 52 week low
  • My internal analyst has an outperform rating and a price target of $64 USD

Based on what I have read so far and my passion for its products I am going to be putting in a buy order for when the market opens tomorrow !

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