Lululemon Athletica Inc. (LULU): Is This Yoga Apparel Retailer Exciting Now?

Peer comparison

At $62 per share, Lululemon is worth nearly $9 billion. The market values Lululemon quite expensively, at more than 20.1 times EV/EBITDA. Compared to its peers including Under Armour Inc. (NYSE:UA) and Great Atlantic and Pacific Tea Co Inc (NYSE:GPS), Lululemon has the most expensive valuation. Gap, at around $36 per share, has a total market cap of nearly $17 billion. It has the cheapest valuation at only 6.83 times EV/EBITDA. Under Armour is the smallest company with $5.3 billion in total market cap. It also seems to have a quite expensive valuation at nearly 20 times EV/EBITDA.

In terms of profitability, Lululemon is the most profitable retailer with the highest operating margin at 27.5%. Gap ranked second with 12.4% operating margin while the operating margin of Under Armour is the lowest at nearly 11.4%. While Under Armour and Lululemon don’t pay any dividends, the dividend yield of Gap is around 1.7%.

The Foolish bottom line

Even with the fantastic historical growth, Lululemon is still quite expensive for me personally. Among the three, I like Gap the most due to its lowest valuation, decent dividend yield, and nice operating margin.

The article Is This Yoga Apparel Retailer Exciting Now? originally appeared on Fool.com and is written by Anh HOANG.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.