Business Valuation Analysis: Taking Lululemon as an Example
DOI:
https://doi.org/10.54691/bcpbm.v38i.3762Keywords:
Lululemon; Corporate valuation; PEST; Competition analysis; Athletic Apparel.Abstract
Lululemon's unique and innovative brand culture and concept, combined with the pursuit of healthy living and the globalization of sport, has led to the company's global growth. Lululemon’s creative fabric technology and design also enhanced its competitive edge. From the perspective of politics, economy, society and technology, due to the rapid expansion and emerging yoga culture and heathy life concepts, it might be overvalued according to its leading and fast-growing status in the athletic clothing market. In this paper, P/E ratio, forward P/E ratio, EV/EBITDA ratio and discounted cash flow model are adopted to value the company. The results of valuation ratios of Lululemon are higher than other competitors, and the data generated from the discounted cash flow model is lower than its current market value, indicating that the price of Lululemon is indeed overestimated. This paper would provide the investors an overview of Lululemon’s brand history, market position and basic valuation statistics.
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