Lululemon's (LULU) stock has fallen over 75% from its peak. A Seeking Alpha analyst calls this decline overdone and presents a tactical buy opportunity.
The stock's valuation has compressed to its lowest levels in years. Lululemon currently trades at just over 10 times forward earnings.
Slowing North American growth, increased competition, and leadership changes drove the slump. The analyst views these headwinds as temporary.
The current valuation offers a compelling risk/reward ratio over a 12-to-18-month horizon. The analyst does not recommend the stock for long-term growth portfolios.