Lululemon vs. Nike: The Valuation Gap No One’s Talking About
Numbers-first look at Lululemon vs. Nike fundamentals, technicals, and a risk-aware trade plan, heading into earnings (LULU Aug 28, NKE Sept 30).
Athleisure has matured from a fashion trend into a global, multi-billion-dollar category, yet the market’s pricing of its leading brands remains far from uniform. Nike NKE 0.00%↑ still commands the cultural spotlight and premium multiple despite a revenue slump, while Lululemon LULU 0.00%↑ continues to deliver high-margin growth but trades at a deep discount. With earnings for LULU on August 28 and NKE on September 30, this is the perfect time to dissect the fundamentals, compare valuation head-to-head, and identify where the mispricing may lie.
Industry & Macro
Sector: Consumer Discretionary → Industry: Athletic apparel/footwear (“athleisure”).
Macro drivers: real disposable income, employment, and rates (financing costs for inventories & capex). FX matters (strong USD = translation headwind, especially for Nike).
Costs: freight and cotton/materials have largely normalized from pandemic spikes; promotional intensity remains the swing factor for gross margins.
Structure: DTC keeps margin higher; wholesale is valuable for reach but lowers control. Inventory discipline + product velocity = outsized ROIC.
Fundamental analysis
LULU is growing, higher-margin, higher-ROIC, and at the snapshot prices you provided, materially cheaper than NKE on P/E, EV/EBIT, EV/Sales, and EV/FCF. On fundamentals alone, the “undervalued” claim for LULU is supported relative to NKE.
Technical analysis
$LULU
Trend: Primary downtrend since spring; daily RSI recovering from oversold (~36). MACD curling; Stoch RSI turning up. ADX high → trend was strong down, may be tiring.
Ichimoku (1D): price reclaimed Tenkan ~193; Kijun ~214 is first heavy resistance; thick bearish cloud above.
Key levels (1D/weekly fibs & MAs):
Support: 188–192, ~180, major 168–170 (weekly 1.6–2.6 extensions zone).
Resistance: 200, 206–211 cluster, ~220, 227–233, then 240–245; bigger trend pivots sit into 257–260 (old 0.786/100-day region).
$NKE
Trend: Bottoming pattern since June; price rides above short/medium EMAs; daily RSI ~61 (bullish momentum improving).
Ichimoku (1D): price near/above span A with Kijun ~75.5 as nearby support.
Key levels (1D/weekly fibs & MAs):
Support: 74.3, 73.1–71.8 (50/100-day), then 69.6 (200-day).
Resistance: ~80, 82–84.6 (major weekly fib cluster), then 90–93; bigger supply into ~100.
Is LULU undervalued?
