LULU 并未走到尽头；尽管面临逆风且销售放缓，其财务质量（低估值倍数、高 ROIC）支撑其在企稳情况下实现约 21% 的内部收益率。

The headline is Lululemon, the yoga pants company. Bur didn't just buy a little. He made it his largest position estimated around 17% of his entire portfolio.

In his own words, he called it the trickster in my portfolio. when he said, and I quote, "This time the trickster is my largest position." Then Lululemon reported a genuinely awful quarter and the stock crashed below $100.

He did the exact opposite. He called the stock under 100 a fat pitch, an easy juicy opportunity, and said he was ready to buy even more, believing it could return 15 to 20% a year for the next 15 or 20 years if the company is able to fix itself.

After reading the report, he flatly admitted, and I quote, "Clearly things have changed for the worse." He even lowered its estimate of what the company's truly worth.

With Lululemon, he decided the company was worth less after the bad news. And yet, the stock became more attractive because it fell even further than the bad news justified.

So, first, let's talk about the star of the show, Lululemon. The stock has been absolutely obliterated, down 54% from its 52- week high of nearly $226 all the way down to $13.

And the recent numbers were genuinely ugly. Sales fell 4%. Its home market of North America dropped 8% and most alarming of all, its famous legging sales fell about 20%. It slashed its forecast for the whole year and dropped below $100 for the first time since 2018.

And remember, months earlier, Bur thought 150 was already a great price. So, getting it down the 90s clearly got him excited. By the way, I think the CEO just announced that him he founder and CEO just announced that he and his wife are getting divorced.

That's going to be a fun thing to go through. So his net worth already got chopped several times over and now it's going to get chopped in half again.

One, the brand is damaged, not dead. People didn't suddenly stop loving Lululemon. The company just stopped giving them exciting new products to buy.

Two, and this is a big one, it just hired a new CEO, Heidi O'Neal, a longtime Nike superstar whose entire specialty is exactly what Lululemon needs, fresh products and brand buzz.

She started this very week, even doing yoga with employees on her first few days. And her whole focus is bringing back exciting, innovative products.

And three, it is sitting on $1.3 billion dollars in cash with almost no debt. So, it has plenty of time to fix things without panicking.

First off, that leggings drop is a giant red flag. Imagine if all of Nike sneakers suddenly fell 20%. You'd question the entire brand.

Number two, trendy rivals like Aloe and Voiri may have permanently stolen Lululemon's cool factor. And three, its problems have now spread to China as well, which was supposed to be its big growth engine.

Plus, clothing turnarounds are famously brutal. Once a brand feels like yesterday's trend, money alone has a very, very hard time fixing it. So, guys, here's Lululemon. The price 11.4 billion.

The enterprise value 13.6. Now that $2 billion difference is essentially their debt.

Guess what? They generated 1.35 billion in free cash flow last year. I want to make note their 5year average is 1.1. So they made more in free cash flow in the last 12 months they did on average over the last 5 years.

And yet the stock is down hard over the last 5 years. Doesn't mean it's smooth sailing from here, but that's a nice thing to see.

It's selling for 8.4 four times free cash flow. Same with the PE. Its profit margins are down. So, still growing its profit even with their profit margin being down from mid4% down to 12.8%.

High returns on capital, guys. This is a sign of quality. These guys are able to make money on the money that's invested in the business at a at a good rate, a really good rate.

Their 5-year return on capital is 28 almost 29%, one year is 20%.

And guys, even with the slowdown, their three-year compounded growth rate and their revenue is still almost 8% per year.

So, just looking at this, I'm not feeling dead, but there are headwinds and sales are currently starting to slack big time. Cash flow is up over the last 5 years. Net income's up, revenue up, low debt, buying back shares, low multiples, and a high return on capital.

These are all things you'd love to see in a company.

Remember, this tells you about today's numbers and the past, not the future. When you buy a stock, you're buying the future. So, if you don't buy this turnaround, it could still be a decent buy if they buy back a lot of shares and just dwindle the business down. Probably not very likely, though.

So analysts do see profit dropping from 13 down to 1093 back up to 1279 over the next few years. So analysts here are assuming a turnaround. But what's interesting is they don't see a drop in overall revenue.

Yeah, basically even for the next year, but growing to 13 billion over the next few years. So, they're hoping for a turnaround here to make the company a lot better in the future. The question is, are they going to be right?

I'm making the assumption that Lulu stabilizes but doesn't become the big grower it was before. First off, revenue growth, I did three, five, and 7% over the next 10 years. For profit margin, I did 10, 12, and 14.

Keep in mind, guys, they in terms of profit and free cash flow, 12 is basically what they've done. So, I'm not assuming it's basically the low side of their profit margin. Their profit in the last five and 10 years has been well over 14%. So, I'm giving them a discount to that.

Next, what PE, what price to free cash flow would I put in this company 10 years from now? Well, guys, it has high returns on capital, which is awesome, but it might be out of favor.

Is my bias showing up here? I only put 13, 16, and 19. Am I letting today's news kind of affect it? Because this PE is supposed to be for 10 years from now, not today. So, I am being because this is basically the average in the market, 15 or 16 over a long period of time.

But I have two different sides of the aisle here. One is high returns on capital, quality business. The other is, is it going to be around in 10 years?

Michael Bur low price of 135, high price of 315, middle price of 210. What this means is if the middle assumptions occur and I pay today's price of 100, I could expect a 21% irr on my investment.

That is pretty freaking solid. The question is, are my assumptions correct?

All right, so we have the eight pillars here just like Lululemon. It's just telling us a snapshot right here. The difference is Adobe is still growing. Lululemon is trying to turn itself around, but ironically, they're selling for very close to the same price to free cash flow, which is kind of interesting to me.

I've looked at Lulu. I've talked about in other in other videos and I've said my only issue is its fashion and it was a huge boomer for a long time. The question is, have women lost their love for it?

That's not like a like I wouldn't be shocked if 20 years from now or 10 years from now Lululemon didn't exist or it was swallowed up by some big company. That would not shock me at all.

That's actually what I think is the best bet here. I think there's companies out there that should look at buying Lululemon. Maybe even Nike.

It's the same stock analyzer tool on your screen right now. It's the same eight pillars. It's the same key metrics. But in this situation, you put your own assumptions in on Lululemon, Adobe, Nvidia. You get your own number today.