Is LULU a Buy Right Now?

• Lululemon's banal is down much than 50% twelvemonth to date.

• The institution is increasing faster internationally than successful the United States.

• 10 stocks we similar amended than Lululemon Athletica Inc. ›

Why is famed capitalist Michael Burry going agelong connected Lululemon Athletica (NASDAQ: LULU)? The feline who was 1 of the inspirations for the publication and aboriginal the movie "The Big Short" says it's due to the fact that the banal for this upscale diversion apparel retailer and shaper has been oversold and is present a bargain, according to caller statements successful his newsletter, Cassandra Unchained.

Whether he's close mostly depends connected whether you judge successful a bully comeback. The shaper of luxurious leggings and diversion apparel is seemingly getting immoderate pushback among consumers for allegedly being elitist, and income person been slowing for immoderate time. In a clip erstwhile galore consumers are feeling unit to tighten their purse strings, discretionary spending connected goods made by Lululemon suffers.

Tariff pressure, little margins, and declining user sentiment person plagued Lululemon, dragging the banal down by much than 50% twelvemonth to date. The banal is presently trading astatine a debased price-to-earnings ratio of 12.45.

However, Lululemon is showing signs of life. The marque is expanding into men's apparel, opening stores internationally, and maintaining a loyal following. There is accrued contention from alternatives similar Alo, Vuori, Athleta (owned by The Gap, Inc.), and Fabletics, truthful Lululemon needs to recapture the magic it erstwhile had among athleisure consumers. It looks similar the retailer's champion accidental to bash conscionable that is going to beryllium extracurricular of the United States. In its latest quarterly earnings, the athleisure institution reported 22% year-over-year maturation successful planetary markets, but conscionable 1% astatine location successful the United States.

If Lululemon is palmy successful diversifying its apparel offerings and expanding to a planetary market, possibly Burry volition beryllium close successful his assertions astir the stock. For investors consenting to clasp connected for astatine slightest a fewer much years, Lululemon has a existent changeable astatine getting backmost into shape.

Before you bargain banal successful Lululemon Athletica Inc., see this:

The Motley Fool Stock Advisor expert squad conscionable identified what they judge are the 10 champion stocks for investors to bargain now… and Lululemon Athletica Inc. wasn’t 1 of them. The 10 stocks that made the chopped could nutrient monster returns successful the coming years.