LULU Stock Price Summary

• Lululemon has bounced back from its tumble in 2014 after a solid fourth quarter earnings report.
• Gross margins have been squeezed in the past few years, but will soon turn around and the cause is easily explainable.
• Revenue has ample room to increase as the athleisure trend continues to grow in popularity and the company is extremely popular with young females.
• We are bullish on Lululemon in the one-month and three-month time horizons.

Algorithmic Analysis

Lululemon has solid signal strengths of over 35 in both the one-month and three-month time horizons, indicating the algorithm believes the stock is currently undervalued. Profit margins will stabilize during the upcoming quarters before turning around due to spending on improving the supply chain. Revenue will continue to grow due to the athleisure trend, while the company adds to this revenue growth with its men’s and Ivviva brands. The turnaround performed in 2014 is remarkable, and I would recommend buying this stock while it is still relatively cheap.

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I Know First Research is the analytic branch of I Know First, a financial start up company that specializes in quantitatively predicting the stock market.