MemeStocking

They say, a good margin business is a good business to invest in.

So let’s find out if Lululemon’s gross margins can make it interesting stock to analyse even though it has been tanking.

Lululemon (LULU) is a yoga-inspired athletic apparel company that creates lifestyle components. The company designs, manufactures and distributes athletic apparel and accessories for women and men. It’s line of apparel assortment, includes fitness pants, shorts, tops and jackets designed for healthy lifestyle and athletic pursuits, such as yoga, training etc . Its fitness-related items comprise an array of accessories like bags, socks, underwear, yoga mats, instructional yoga DVDs, water bottles and other equipments.

The company sells its products primarily in North America through a chain of corporate-owned and retail stores, outlets and warehouse sales, independent franchises, and a network of wholesale accounts. It also has an e-commerce site with an aim to rapidly expand its online business.

Fair value debate:

• LULU ($378.06) is undervalued by 20.54% relative to its estimated Fair Value price of $475.81 based on Discounted Cash Flow (DCF) modelling
• However there is another way to look at it- Considering the Price-to-Earnings (P/E) ratio, Lululemon looks pretty overvalued when compared with the sub-industry and the S&P 500. The stock has a trailing 12-month P/E of 31.36X compared with 13.89X for the industry and 21.08X for the S&P 500. Its trailing 12-month P/E ratio is above the median level of 30.65X and below the high level of 37.04X scaled in the past year.

Price to Earnings:

• LULU is poor value based on its earnings relative to its share price (30.91x), compared to the US Apparel Retail industry average (26.59x)
• LULU is good value based on its earnings relative to its share price (30.91x), compared to the US market average (43.77x)

Profit margin

• LULU's Earnings (EBIT) of $2.18B can safely cover interest payments on company debt ($1.40B)
• LULU's profit margin has increased (+5.6%) in the last year from (10.5%) to (16.1%)

Assets and liabilities

• LULU's short-term assets ($4.06B) exceed its short-term liabilities ($1.63B)
• LULU's short-term assets ($4.06B) exceed its long-term liabilities ($1.23B)

Cash Flow

• LULU's operating cash flow ($2.30B) is sufficient to service the company's debt ($1.40B)

Profitability and margins

• LULU outperforms both the industry average and the S&P 500 in terms of profitability margins. With a gross margin of 58.3%, an operating margin of 23.0%, and a net margin of 16.1%, LULU demonstrates superior efficiency in managing its costs and expenses compared to the industry and broader market. This suggests LULU has a strong pricing strategy, cost control, and operational efficiency.
• The company's returns—Return on Assets (ROA) at 24.4%, Return on Equity (ROE) at 36.6%, and Return on Invested Capital (ROIC) at 31.5%—are all substantially higher than those of the industry and S&P 500, indicating LULU's effectiveness in utilsiing its assets and equity to generate earnings and its superior performance in investing capital relative to peers and the broader market

Analyst forecast of stock performance

• Minimum Forecast – Can drop to as low as $300.00, which would represent a decrease of 20.65% from the current price.
• Average Forecast – Mean projection by analysts is $494.72, reflecting an increase of 30.86% from the current price. This is the consensus average price target.
• Maximum Forecast- Stock can rally as high as $570.00, showing a significant potential increase of 50.77% from the current price

Revenue Forecast

• Short-term Revenue Growth – The average 1-year forecast predicts revenue to increase to $10.8 billion, which is a 12.07% rise from the current figure
• Long-term Revenue Growth – Average 2-year forecast shows a 25.04% increase to $12.0 billion, and the 3-year forecast predicts a 38.09% rise to $13.3 billion. The range of estimates for January 31, 2027, is between $13.0 billion (low) and $13.5 billion (high), with a mean estimate of $13.3 billion

Revenue Growth Forecast

• LULU's revenues are forecast to grow faster (11.35% per year) than the US Apparel Retail industry average (6.68%)
• LULU's revenues are forecast to grow faster (11.35% per year) than the US market average (10.57%)

Earnings trend with stock price trend and consensus estimates

• Black line – historical stock price movement
• Blue dashed line – indicates the 12-month trailing EPS, a measure of the company's earnings per share calculated over the past 12 months at each given point
• Green dotted line – consensus estimate for the stock's future EPS

Some last thoughts. Yoga pants apparently rock.

• Lululemon's stock has surged 56.6% in a year due to continuous earnings beats and its successful 'Power of Three X2' growth strategy aiming for $12.5 billion revenue by 2026.
• The company predicts a 15% total net revenue CAGR from 2021 to 2026, expecting earnings growth to surpass revenue growth, underpinned by a strong financial foundation
• In-store sales thrive with a 9% year-over-year growth and enhanced omni-channel capabilities, while e-commerce is bolstered by investments in functionality and fulfillment, contributing to 18% revenue growth.
• Following stellar holiday sales, Lululemon raised its Q4 fiscal 2023 forecasts, signaling robust company performance and adaptability to consumer trends.

I am not a financial analyst , trader or a financial advisor. I curate analysis. Nothing I publish should be taken as investment trading or broking advice. The data I use is curated from various news sources and based on the date it's taken number's may change. Reader's should do their own analysis for the most up-to-date numbers.

Celestica, Inc. is one of the largest electronics manufacturing services company in the world, serving the computer, and communications sectors. The company provides competitive manufacturing technology and service solutions for printed circuit assembly and system assembly, as well as post-manufacturing support to many of the world's leading original equipment manufacturers. Celestica's extensive depth and breadth of offerings supports a wide variety of customer requirements from low volume, high complexity custom products to high volume commodity products.

Fundamental numbers:

• 38.90+ Weighted Alpha
• 35.72% gain in the last year
• Above its 20, 50 and 100 day moving averages
• Up 27.27% in the last month
• Recently traded at $50.76 with 50 day moving average of $43.09
• Market Cap $5.60 billion
• P/E 9.53
• Dividend yield 1.63%
• Revenue projected to grow 6.30% this year and grow another 10.00% next year
• Earnings estimated to decrease 9.10% this year, increase an additional 19.90% next year and continue to compound at an annual rate of 26.16% for the next 5 years

Price to Earnings:

• CLS is good value based on its earnings relative to its share price (22.03x), compared to the US Electronic Components industry average (27.5x)
• CLS is good value based on its earnings relative to its share price (22.03x), compared to the US market average (44.51x)

Profit margin

• CLS's Earnings (EBIT) of $383.20M can safely cover interest payments on company debt ($782.80M)
• CLS's profit margin has increased (+1.1%) in the last year from (2%) to (3.1%)

Asset to liabilities

• CLS's short-term assets ($4.51B) exceed its short-term liabilities ($3.22B)
• CLS's short-term assets ($4.51B) exceed its long-term liabilities ($902.70M)
• CLS's debt to equity ratio (2.33) is considered high

Cash Flow

• CLS's operating cash flow ($429.70M) is sufficient to service the company's debt ($782.80M)

Price consensus and EPS beat

Analyst projections

Revenue forecast

• CLS's revenue is forecast to grow at a rate of 9.77% per year, which is not exceptional
• But it’s the rate of growth which makes it interesting

Revenue growth forecast

• CLS's revenues are forecast to grow faster (9.77% per year) than the US Electronic Components industry average (2.45%)

Some other pointers

Diverse Client Base and Services: Celestica has a diversified portfolio of clients across various industries such as telecommunications, information technology, healthcare, aerospace, and defense. This diversification helps mitigate risks associated with downturns in any single sector.

Global Operations and Supply Chain Efficiency: With manufacturing and design facilities in Asia, the Americas, and Europe, Celestica is well-positioned to serve global clients efficiently. The company's focus on optimizing its supply chain and reducing lead times can provide a competitive advantage.

Investment in High Growth Areas: Celestica has been investing in high-growth areas such as cloud computing, healthcare technology, and renewable energy. These investments could lead to higher growth rates as these sectors expand.

Financial Performance and Stability: Evaluating the company's financial performance, including revenue growth, profit margins, and cash flow stability, is crucial. If Celestica demonstrates strong financial health, it could be a more reliable investment.

Strategic Acquisitions and Partnerships: Celestica has a history of strategic acquisitions and partnerships that have expanded its service offerings and market reach. Future acquisitions could further enhance its capabilities and competitiveness in the EMS industry.

I am not a financial analyst , trader or a financial advisor. I curate analysis. Nothing I publish should be taken as investment trading or broking advice. The data I use is curated from various news sources and based on the date it's taken number's may change. Reader's should do their own analysis for the most up-to-date numbers.

CA-based Air Lease Corporation is primarily involved in purchasing commercial aircraft directly from the manufacturers, leasing the same to its airline customers across the globe. Noteworthy manufacturers that the company works with are Bping and Airbus.

Besides leasing, the company sells planes to third parties such as other leasing companies, financial services and corporate airline entities. It also provides investors and owners with fleet management services and charges a management fee in return. The company faces competition from aircraft manufacturers, banks, financial institutions, other leasing companies, aircraft brokers and airlines.

Fundamental numbers:

• 38.90+ Weighted Alpha
• 35.72% gain in the last year
• Recently traded at $50.76 with 50 day moving average of $43.09
• Market Cap $5.60 billion
• P/E 9.53
• Dividend yield 1.63%
• Revenue projected to grow 6.30% this year and grow another 10.00% next year
• Earnings estimated to increase an additional 19.90% next year
• Compound at an annual rate of 26.16% for the next 5 years

Price to Earnings:

• AL is good value based on its earnings relative to its share price (9.84x), compared to the US Rental & Leasing Services industry average (16.24x)
• AL is good value based on its earnings relative to its share price (9.84x), compared to the US market average (44.45x)

Profit Margin

• AL's profit margin has increased (+27.3%) in the last year from (-6%) to (21.3%)

Assets to Liabilities

• AL's debt has increased relative to shareholder equity (3.25), over the past 5 years ago (2.85)
• AL's debt to equity ratio (3.25) is considered high

Cash Flow

• Operating Cash Flow: The company generated $1.7 billion in cash from operating activities, indicating robust operational efficiency and a healthy cash inflow from its core business activities.
• Investing Cash Flow: AL had a negative investing cash flow of $2.8 billion, mainly due to capital expenditures of $4.528 billion, reflecting significant investments in property, plant, and equipment, likely for expanding its fleet of aircraft.
• Financing Cash Flow: The financing activities provided $716 million, with debt issuance contributing significantly to this inflow, suggesting the company is financing its expansion partly through new debt.
• Free Cash Flow: The free cash flow was negative at $2.781 billion, influenced by the high capital expenditures, highlighting the company's substantial investments in its growth

Analyst forecast:

Projected Sales and EPS growth

• Quarterly and annual sales estimates from 2023 to 2025,show consistent pattern of growth. Sales are expected to increase each quarter, with the annual total also rising year over year from $2.685 billion in actual sales for 2023 to an estimated $3.111 billion in 2025.
• EPS estimates follow a similar growth trend, with a rise in each subsequent year from 2023's actuals of $5.14 to an estimated $5.72 in 2025.

Earnings and growth history

• AL's has demonstrated consistent long-term earnings growth over the past 10 years (174.47%)

Consensus estimates

• Strong track record of rewarding its shareholders, reflected in its notable dividend payment history. On November 3, 2023, the company raised its quarterly cash dividend by 5%, moving from 20 cents to 21 cents per share, set to be paid on January 10, 2024, to shareholders
• Experienced a significant 11% year-over-year revenue increase in 2022, fueled by the expansion of its fleet, which saw the acquisition of 60 new aircraft. As of the end of 2023, the company’s fleet comprised 463 owned and 78 managed aircraft, with an additional 334 aircraft on order from Boeing and Airbus scheduled for delivery by 2029.
• The demand for Air Lease's wide-body passenger aircraft has been supported by robust freight and cargo markets, along with a recovery in airline operations, driving lease demands.
• Consistently surpassed earnings expectations. Performance continued in the fourth quarter of 2023, with earnings per share of $1.89 exceeding the consensus estimate of $1.1, marking a 56.2% year-over-year increase. Revenues also exceeded expectations, with a total of $716.6 million, 19.11% higher than the previous year.

I am not a financial analyst , trader or a financial advisor. I curate analysis. Nothing I publish should be taken as investment trading or broking advice. The data I use is curated from various news sources and based on the date it's taken number's may change. Reader's should do their own analysis for the most up-to-date numbers.

Idaho-based Micron Technology is a worldwide providers of semiconductor memory solutions.

Through global brands, namely Micron, Crucial and Ballistix, Micron manufactures and markets high-performance memory and storage technologies including Dynamic Random Access Memory (DRAM), NAND flash memory, NOR Flash, 3D XPoint memory and other technologies. Its solutions are used in leading-edge computing, consumer, networking and mobile products.

A major portion of the revenues is derived from DRAM sales. The company's mission is to be the most efficient and innovative global provider of semiconductor memory solutions.

Micron reported revenues of $15.54 billion in fiscal 2023

Fundamental numbers:

• Weighted Alpha – + 113.80
• Market cap – $129B
• 5 day change – +26.17
• EPS: -3.63
• Annual sales (2023) – $15.5B
• Annual income (2023) – (-5.8B)
• Q1 24 earnings:
  • Revenue: $5.82 billion vs analyst estimates of $5.35 billion (8.8% beat)
  • EPS (non-GAAP): $0.42 vs analyst estimates of –$0.24 ($0.66 beat)
  • Revenue Guidance for Q2 CY2024 is $6.6 billion at the midpoint, above analyst estimates of $6.00 billion
  • Gross Margin (GAAP): 18.5%, up from -32.7% in the same quarter last year
  • Free Cash Flow was –$29 million compared to –$395 million in the previous quarter

The not so good

• P/E: -34,5x
• Profit margin: -20.6 %
• Earnings: -3.7B

The change in trend

Summary

Micron’s better-than-expected Q1 performance reflects gains from improved market conditions, strong sales executions and double-digit growth across multiple business units. The positive impact of inventory improvement in the data center, as well as stabilization in other markets, such as automotive, industrial and others, have also contributed to its results. It anticipates the pricing of Dynamic Random Access Memory (DRAM) and NAND chips will keep increasing next year, hence improving its revenues. The pricing benefits will primarily be driven by rising AI server causing a scarcity in the availability of cutting-edge DRAM and NAND supply. The 5G adoption in the Internet of Things devices and wireless infrastructure is likely to spur demand for memory and storage.

Profit margin (Q1 change)

MU's cash burn is expected to be positive in the next year ($8.56B), even accounting for increasing cash burn (158.72%)

Asset to liabilities

• MU's short-term assets ($23.44B) exceed its short-term liabilities ($6.26B)
• MU's short-term assets ($23.44B) exceed its long-term liabilities ($15.59B)

Cash Flow

SMCI's cash and short-term investments ($725.66M) can cover SMCI's cash burn ($169.23M) for at least 1 year

Forecast growth

• 68% analysts with a strong buy rating

Revenue Forecast

• MU's revenue is forecast to grow at an exceptional rate of 35.97% per year

More projections on sales growth and EPS

Growth projections compared to industry and market

Notable pointers:

• Micron Technology's recent quarter performance surpassed expectations due to better market conditions, effective sales, and growth in several business units, marking a rebound from previous industry slumps. The revenue increase is linked to improved data center inventory and stability in markets like automotive and industrial. With an expected rise in memory chip demand in 2024, particularly for DRAM and NAND chips driven by AI server demand, Micron predicts higher chip prices, which should boost future revenues.
• Micron is experiencing growth from the widespread use of DRAM and NAND chips in PCs, servers, smartphones, and SSDs. The company anticipates continued demand increase due to the adoption of 5G, advancements in smartphone technology, and innovations in AR/VR. Furthermore, the expanding need for memory and storage in IoT devices, wireless infrastructure, and data centers is expected to further drive demand.
• Micron is pivoting towards CXL-enabled memory products following its exit from 3D XPoint memory chip production and the sale of its Utah factory. This strategy is designed to boost computing performance and cut costs using advanced memory technology. Additionally, Micron is expanding into the SSD market, spurred by the popularity of slim laptops, tablets, and the overall increase in digital data. With the SSD market projected to hit $86.12 billion by 2030, this move could help Micron counteract any downturns in the PC market.
• Micron has solidified its market presence via strategic acquisitions, boosting its manufacturing capabilities, DRAM products, and testing services. With a healthy financial status, including about $9.7 billion in cash and investments and $12.2 billion in total liquidity, Micron is poised for further growth, strategic purchases, and enhancing shareholder value. Its strong cash flow facilitates substantial dividends and share buybacks, underscoring its financial stability and positive future prospects.

I am not a financial analyst , trader or a financial advisor. I curate analysis. Nothing I publish should be taken as investment trading or broking advice. The data I use is curated from various news sources and based on the date it's taken number's may change. Reader's should do their own analysis for the most up-to-date numbers.

Ticker: CROX: $141.62

Summary: Crocs, Inc., together with its subsidiaries, designs, develops, manufactures, markets, distributes, and sells casual lifestyle footwear and accessories for men, women, and children under Crocs and HEYDUDE Brand in the United States and internationally. The company offers various footwear products, including clogs, sandals, slides, flips, wedges, platforms, socks, boots, charms, flip flops, sneakers, and slippers. It sells its products through wholesalers, retail stores, e-commerce sites, third-party marketplaces, and kiosks/store-in-store locations. Crocs, Inc. was founded in 1999 and is headquartered in Broomfield, Colorado

Fundamental Numbers:

• 38.80+ Weighted Alpha
• 15.55% gain in the last year
• Above its 20, 50 and 100 day moving averages
• 17 new highs and up 21.85% in the last month
• Relative Strength Index 76.60%
• Recently traded at $141.00 with 50 day moving average of $113.56
• Market Cap $8.47 billion
• P/E 10.95

PE Summary:

• CROX is good value based on its earnings relative to its share price (10.97x), compared to the US Footwear & Accessories industry average (30.07x)
• CROX is good value based on its earnings relative to its share price (10.97x), compared to the US market average (43.91x)

Profit Margin

• CROX's Earnings (EBIT) of $1.04B can safely cover interest payments on company debt ($2.00B)
• CROX's profit margin has increased (+4.8%) in the last year from (15.2%) to (20%)

Cash Flow

• CROX's operating cash flow ($930.44M) is sufficient to service the company's debt ($2.00B)

Assets to Liabilities

• CROX's short-term assets ($910.70M) exceed its short-term liabilities ($698.30M)
• CROX's long-term liabilities ($2.49B) exceed its short-term assets ($910.70M)
• CROX's debt has increased relative to shareholder equity (2.19), over the past 5 years ago (2.12)

3 Year Revenue growth

• CROX's revenue has grown faster (29.49% per year) than the US Footwear & Accessories industry average (11.3%)
• CROX's revenue has grown faster (29.49% per year) than the US market average (13.63%)
• CROX's revenue growth is slowing down – its growth over the last year (11.46%) is below its 5-year compound annual rate (29.49%)

10 year historical performance

• CROX's has demonstrated consistent long-term earnings growth over the past 10 years (10,658.33%)

Return to Equity

• CROX's Return on Equity (65.9%) shows a company that is highly efficient at transforming shareholder equity into returns

I find this stock interesting. While last year, growth slowed to 11%, the last three months has seen a remarkable surge This performance is underpinned by a strong Q4 result with leading operating margins and double-digit growth, indicating a strong financial health and operational efficiency of the company. Over the past three years the company revenue has grown by 122% compared to the market (72%) .

The company's earnings reported in Q1 showed an earnings per share (EPS) of $2.58 for the quarter, surpassing consensus estimates. This beat has been a significant factor in the positive sentiment around the stock.

Analyst movements

• KeyCorp boosted its price target for Crocs to $149 from $130
• Bank of America raised its target from $140 to $150, i

I am not a financial analyst , trader or a financial advisor. I curate analysis. Nothing I publish should be taken as investment trading or broking advice. The data I use is curated from various news sources and based on the date it's taken number's may change. Reader's should do their own analysis for the most up-to-date numbers.