Lululemon stock price has suffered a harsh reversal in the past few months, moving from a record high of $516 in 2024 to the current $188. This crash has brought its market capitalization from a record high of over $68.27 billion to the current $23 billion. This article explores whether the stock has more downside or whether it will rebound over time.
Lululemon growth has stalled
Lululemon Athletica has moved from being one of the fastest-growing companies on Wall Street to a fallen angel that has shed billions of dollars in value.
Its revenue growth has largely stalled, moving from 42% in 2022 to 10% in 2024, and much lower in 2025.
The most recent results showed that the company’s revenue rose by 7% in the third quarter to $2.6 billion. Most of this revenue growth came from its international business, which expanded by 33£%.
Its lucrative American business retreated by 2% as competition from companies like Nike, Under Armour, Adidas, Puma, and Reebok. It also dropped because of Donald Trump’s tariffs.
These results also showed that comparable sales rose by 1%, with the international segment rising by 18%. Its comparable sales in the Americas dropped by 5%.
Lululemon’s gross profit rose by 2% to $1.4 billion, while the gross margin eased by 290 basis points to 55.6%.
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Wall Street analysts expect Lululemon’s business to slow
Analysts believe that the company’s business will continue to slow in the near term. The average estimate is that the upcoming revenue will come in at $3.59 billion, down by 0.49% from the fourth quarter of 2024.
If this happens, the company’s annual revenue will come in at $11 billion, up by 4.26% from a year earlier. This growth will then move to $11.52 billion in the next financial year, up by 4.3%.
These challenges explain why the company’s founder is seeking more changes. He has launched a proxy fight that seeks to replace board directors nominated by Advent, the private equity company.
This explains why the consensus price target among analysts has dropped to $228 from $390 last year. Also, most analysts tracking the company have a hold or equal weight rating. Only 2 analysts have a buy rating on the company.
Lululemon stock has also dropped as more insiders continued selling the shares. Data shows that 3 insiders have sold shares worth over $9 million in the last 12 months.
Lululemon stock price technical analysis
The weekly timeframe chart shows that the LULU stock price has crashed in the past few years. It moved from a high of $514 in December 2023 to the current $188.
The stock has remained below the important support level at $226, its lowest level in August 2024. It recently retested that level, a price action known as a break-and-retest.
Lululemon stock has remained below all moving averages. It has also moved below the important level at the strong, pivot, reverse of the Murrey Math Lines tool.
Therefore, the most likely scenario is where the stock continues to fall, potentially to last year’s low of $159. A move below that level will point to more downside, potentially to $125, the ultimate support.
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