lululemon athletica inc. (NASDAQ:LULU)

The analysis of the provided financial ratios over the indicated quarterly periods reveals distinct temporal trends and fluctuations in the valuation metrics of the company.

Price to Earnings (P/E) Ratio

The P/E ratio shows a significant rise beginning from May 2020, reaching a peak around early 2021 with values above 80. This elevated level suggests a period where the market had high growth expectations or the earnings were relatively low compared to the share price. Following this peak, the P/E ratio experiences a gradual decline, moving to lower levels by mid-2024, stabilizing in the low-to-mid 20s range. This downward trend could indicate improving earnings performance or a market adjustment in valuation.

Price to Operating Profit (P/OP) Ratio

Similar to the P/E ratio, the P/OP ratio climbs sharply starting from mid-2020, peaking near early 2021 at just over 60, indicating that the market was highly valuing the company’s operating profits or that operating profits had temporarily decreased. Post-peak, a sustained decline is observed with the ratio dropping below 20 by mid-2024, reflecting either improving operating profits or a normalization of market valuation relative to operating earnings.

Price to Sales (P/S) Ratio

The P/S ratio follows a comparable pattern, escalating from mid-2020 to early 2021 and peaking around 11.8. Following this, there is a steady decrease throughout subsequent quarters, reaching approximately 3.7 by mid-2024. This trend suggests that the company's sales growth or market valuation in relation to sales experienced contraction or market recalibration post-peak.

Price to Book Value (P/BV) Ratio

The P/BV ratio displays somewhat less pronounced volatility compared to the other ratios. After a dip in early 2020, the ratio rises sharply through mid-2020 to a peak around 22.78, then declines gradually through late 2024, maintaining a range mostly between 7.89 and 16.29. This indicates fluctuations in the company's market valuation relative to its book value, with a general trend of decreasing over time after the peak period.

Overall, all examined valuation ratios experienced a notable surge starting around mid-2020, reaching peaks near early 2021, likely reflecting heightened market optimism or shifts in company financial performance during that period. Subsequently, a consistent decline across these ratios points to a market cooling off or improvements in underlying financial metrics such as earnings and operating profit. The downward movement suggests a convergence toward more moderate and sustainable valuations over the last observed quarters.

The financial data reveals distinct trends in share price, earnings per share (EPS), and price-to-earnings (P/E) ratio over the analyzed quarterly periods.

Share Price

The share price displayed notable fluctuations throughout the period. Initial values rose substantially from $170.89 to a peak above $460 in late 2023, representing a period of strong investor confidence and market performance. This was followed by a pronounced decline in subsequent quarters, with values dropping back to the range of $259 to $345 by early 2025. The share price experienced several short-term peaks and troughs, indicating volatility likely influenced by market or company-specific factors.

Earnings Per Share (EPS)

EPS showed a consistent upward trajectory from the earliest reported value of $4.96 to a high of approximately $15.08 by the latest quarter analyzed. Despite a moderate dip around early 2023 to mid-2023, EPS generally increased quarter over quarter, suggesting improving profitability and operational efficiency. This steady EPS growth contrasts with the more volatile share price movements.

Price-to-Earnings (P/E) Ratio

P/E ratios exhibited significant variability. Early values ranged from about 40 to over 80, indicating high market expectations relative to earnings. A downward trend in the P/E ratio became apparent after late 2023, decreasing to below 25 by mid-2024 and maintaining that range thereafter. This decline in P/E ratio, despite rising EPS, suggests either a correction in market valuation or changing investor sentiment reducing the premium placed on earnings growth.

In summary, while earnings per share steadily improved, reflecting strong financial performance and profitability growth, the share price showed volatility with considerable rises and declines. The P/E ratio's decrease in later periods may indicate a market adjustment to the share price relative to earnings, possibly reflecting more conservative investor expectations or external economic factors influencing valuation.

The financial data reveals several notable trends over the reviewed periods.

Share Price

The share price demonstrated considerable volatility from May 2019 to May 2025. Initially, there was a rise from approximately $171 to a peak exceeding $460 around October 2023 to January 2024. This was followed by a notable decline in subsequent quarters, with the price falling to near $259 by mid-2024, before partially recovering toward $331 by mid-2025. Overall, the share price experienced sharp increases and declines, reflecting periods of heightened market optimism and correction phases.

Operating Profit per Share

Operating profit per share, available from early 2020 onwards, showed a consistent upward trajectory. Starting at $6.83 in February 2020, it increased steadily each quarter, reaching approximately $20.96 by May 2025. This trend suggests ongoing improvements in profitability on a per-share basis, indicating operational efficiency gains or successful profit expansion initiatives over the period.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio displayed significant fluctuations. It was relatively elevated between mid-2020 and late 2021, reaching levels above 60 at certain points, which may imply market high valuation relative to operating profit. Subsequently, the ratio trended downward, falling below 20 by mid-2024 and maintaining a range between approximately 15 and 18 in early 2025. This decline suggests that the market's valuation increased at a slower pace than operating profit or adjusted downward to more conservative levels after prior peaks.

Overall Insights

The data points to a company experiencing growth in underlying profitability while facing market valuation swings. The increase in operating profit per share indicates improving core financial performance. However, the share price movements and P/OP ratio changes suggest that external market sentiment and valuation expectations experienced periods of exuberance followed by correction. The decoupling of rising operating profit from fluctuating share price and valuation multiples may reflect shifting investor confidence or broader market conditions impacting the stock’s trading dynamics.

The data reveals several notable trends across the examined time periods. The share price demonstrates significant volatility, with marked increases and decreases over the years. It initially rises from approximately 171 US dollars in early 2019 to a peak around 416 US dollars by late 2021, followed by a general decline into mid-2024, punctuated by intermittent rebounds. The highest share prices occur around the fourth quarters of 2021 and 2023, exceeding 460 US dollars, followed by a steep fall to values near 259 US dollars in mid-2024.

Sales per share, which begins reporting from early 2020, shows a consistent upward trajectory. Starting near 30.57 US dollars, it steadily climbs each quarter, reaching approximately 89.7 US dollars by the second quarter of 2025. This steady increase suggests ongoing growth in revenue or operational scale per share over the observed periods.

The price-to-sales (P/S) ratio exhibits a decreasing trend overall, despite some fluctuations. Initially, from early 2020 through late 2020, the P/S ratio escalates from 6.57 to a high near 11.82, indicating that the share prices were increasing faster than sales per share during this time. Thereafter, the ratio generally declines, reaching a low around 3.18 in mid-2024. This decline in P/S ratio implies either a correction in share price valuations relative to sales or accelerated growth in sales per share relative to stock price increases. The P/S ratio's drops coincide with decreases in share prices during some periods, but also with continuous sales per share growth, highlighting diverging trends between market valuation and operational performance.

In summary, share prices have experienced substantial fluctuations, peaking sharply before retreating notably. Meanwhile, sales per share consistently increase, underscoring sustained revenue growth or improvements in sales-related efficiency on a per-share basis. The P/S ratio initially rises sharply but subsequently falls, indicating a realignment between market valuation and underlying sales results. These patterns suggest a maturing market perception of the company's value relative to its sales growth over the analyzed timeframe.

Share Price

The share price experienced notable fluctuations over the analyzed periods. Initially, there was a steady increase from approximately $171 to a peak near $369 within mid-2019 to late 2020, indicating strong market performance. This was followed by a decline and stabilization around the low to mid $300 range through early 2022. Subsequently, share price surged again, reaching an all-time high of approximately $479 in early 2024. However, a marked decrease followed thereafter, with prices settling near $331 by mid-2025. This pattern suggests periods of both bullish momentum and correction phases.

Book Value per Share (BVPS)

Book value per share showed a consistent upward trend across all reported quarters. Starting from about $10.49, BVPS nearly tripled to approximately $36 by mid-2025. This steady increase indicates ongoing growth in the company's net asset base on a per-share basis, reflecting sustained value accumulation and possibly retained earnings growth over time.

Price-to-Book Value Ratio (P/BV)

The P/BV ratio displayed considerable volatility, moving inversely to the movement in book value per share and share price at times. Initially, the ratio hovered between 16 and 18, then spiked as high as approximately 23 during late 2019 to late 2020, corresponding with rapid share price increases. This was followed by a downward trend, dropping below 10 by mid-2024 to mid-2025, despite the increasing book value. The decreasing P/BV ratio in the later periods suggests the market began valuing the company less aggressively relative to its book value, possibly reflecting changing investor sentiment or reevaluation of growth prospects.

Overall Observations

The data reveal a company growing its fundamental net asset value steadily while experiencing more volatile stock price movements. Share price peaks do not always coincide with peaks in book value growth, evident from sharp price corrections after reaching highs. The fluctuating P/BV ratio suggests varying market perceptions of value and risk over time. The recent lowering of the P/BV ratio, despite continued book value growth, may indicate more conservative market valuation or an adjustment phase following prior overextension in share price. This analysis highlights the importance of considering both market prices and underlying book values to assess valuation dynamics comprehensively.