u/Fantastic-Tomorrow25

Author rates Lululemon a BUY with a $277 base-case price target and $229-$305 range, arguing shares at about 8.9x NTM EV/EBITDA are priced as structurally impaired despite top-decile ROIC, no long-term debt, and double-digit China/Rest of World growth. The claimed mechanism is that North American softness reflects product-cycle timing and diffuse competition from Vuori/Alo rather than brand decay, with catalysts including a broad product refresh beginning late 2026, CEO transition/activist scrutiny, and international store expansion. Main stated risk is that North American same-store sales fail to stabilize or the product refresh does not drive a U.S. comp inflection, with sustained negative mid-single-digit comps and China growth below 15% triggering thesis reassessment.