LULU
Lululemon Athletica Inc.
$120.26
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 4.9% above fair value
You pay
$120.26
Bear
$99.29
Fair
$114.63
Bull
$127.91
Bear
$99.29
-17.4%
3% stage 1 growth, 11% discount
Fair
$114.63
-4.7%
5% stage 1 growth, 11% discount
Bull
$127.91
+6.4%
6% stage 1 growth, 11% discount
Adjust Assumptions
5.0%
11.0%
3.0%
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
34%
Implied Market Multiple
15.6x
Market is pricing in (growth)
5.6%
vs 5.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (71 analysts)
$124.55
Divergence from AlphaVal
8%
Summary
Using a two-stage FCF DCF with 5% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $114.63 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