Lululemon Athletica Inc. (NASDAQ:LULU) shareholders are probably feeling a little disappointed, since its shares fell 3.4% to US$259 in the week after its latest second-quarter results. Lululemon Athletica reported US$2.4b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$3.15 beat expectations, being 8.0% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following the latest results, Lululemon Athletica's 35 analysts are now forecasting revenues of US$10.5b in 2025. This would be an okay 4.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 4.9% to US$13.95. Before this earnings report, the analysts had been forecasting revenues of US$10.7b and earnings per share (EPS) of US$14.07 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With no major changes to earnings forecasts, the consensus price target fell 7.6% to US$322, suggesting that the analysts might have previously been hoping for an earnings upgrade. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Lululemon Athletica, with the most bullish analyst valuing it at US$445 and the most bearish at US$194 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Lululemon Athletica's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 9.7% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.6% per year. Even after the forecast slowdown in growth, it seems obvious that Lululemon Athletica is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Lululemon Athletica going out to 2027, and you can see them free on our platform here.

We also provide an overview of the Lululemon Athletica Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.