Bear Of The Day: Lululemon Athletica (LULU)

Lululemon Athletica (LULU) is a Zacks Rank #5 (Strong Sell) despitethe company recently posted a solid beat and the stock has sold off as a result.  This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.Description                                              lululemon athletica, Inc. engages in the business of designing, distributing, and retailing technical athletic apparel, footwear, and accessories. It operates through the following segments: Company-Operated Stores, Direct to Consumer, and Other. The company was founded by Dennis James Wilson in 1998 and is headquartered in Vancouver, Canada.Earnings HistoryWhen I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.In the case Lululemon Athletica (LULU)I see the company has beat the Zacks Consensus Estimate in each of the last four quarters.  This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.The most recent quarter saw the company report EPS of $3.10 when the consensus was calling for $2.84.  That 26 cent beat translates into a positive earnings surprise of 9.15%.Earnings EstimatesThe Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower.  For Lululemon Athletica (LULU) I see annual estimates for next year moving lower of late.The current fiscal year consensus number has slid from $14.72 to $13.01 over the last 60 days. The next fiscal year has moved from $15.89 to $13.22 over the last 60 days.Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).It should be noted that a lot of stocks in the Zacks universe are seeing negative earnings estimate revisions.  That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).Reclined 5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report lululemon athletica inc. (LULU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks