Lululemon Stock Drops 9%; Is It a Buying Opportunity?

Once again, lululemon athletica (NASDAQ: LULU) proved that it is a fast-growing name in athletic and athleisure wear. Even in the time of the coronavirus and a tougher retail environment, Lululemon seems to be doing better than the competition. The company reported second-quarter results on Tuesday that topped estimates. Despite the positive news, the stock was down 9% Wednesday afternoon.

Overall, the slump might have more to do with the stock being expensive. Shares currently carry a premium of 71 times last year's earnings. There's been a bit of a pullback in tech lately, and it's not a stretch to say that realism in value might shift a bit to other areas.

Lululemon's price fall seems to present a buying opportunity. I've shunned this stock before because of valuation, and missed out on a growth opportunity every time. There's no arguing at this point that within athletic apparel, Lululemon is the most strategically placed investment.

Source Fool.com