Rapidly growing revenue has helped its stock price surge more than 80% this year, as the company looks to expand in areas like menswear, e-commerce and international sales. Compared with the S&P 500 Retail ETF’s growth of less than 5% this year, Lululemon stock has soared more than 80% in 2019, easily eclipsing rivals like Nike and Under Armour, which have gained 25% and 2%, respectively. Chief critic: “There’s very little room for error at this high price,” says Morningstar analyst David Swartz, the only Wall Street analyst who maintains a “sell” rating on Lululemon stock. “It’s being valued kind of like a software company, but it’s an apparel company, and not only that, it’s a brick-and-mortar retailer—and many of those aren’t doing well,” he points out. What to watch for: Morningstar forecasts average annual revenue growth of 12% over the next decade, with total sales hitting nearly $10 billion by 2028.

Source: Forbes December 04, 2019 14:26 UTC