LULU
Lululemon Athletica Inc.
$119.26
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 0.3% below fair value
You pay
$119.26
Bear
$103.61
Fair
$119.62
Bull
$133.48
Bear
$103.61
-13.1%
3% stage 1 growth, 11% discount
Fair
$119.62
+0.3%
5% stage 1 growth, 11% discount
Bull
$133.48
+11.9%
6% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
34%
Implied Market Multiple
15.5x
Market is pricing in (growth)
5.5%
vs 5.0% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $128.89 from 71 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $119.62 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions