6/6/25 - $lulu - Buy $260s, but not "need" to own

6/6/25 :: VROCKSTAR :: LULU
Buy $260s, but not "need" to own

- stock is objectively a buy here in the $260s, let's get that out of the way
- but when it comes to "what can happen next" or "what's the floor/drawdown", i think a few considerations
- flat EPS guide in '25 is not bc of structural issues w brand, so high teens PE esp on '26 #s is reasonable and FCF supports in mid to high 4s on '26 ests.
- the main fly in the ointment is obviously the US consumer and recession issues (second would be tariffs and ability to take price - which they talked on conf call - into this "weaker" consumer)
- ultimately i'd expect the stock to recover a bit here into the high $200s... perhaps $280 such macro doesn't fall to pieces immediately, but will be hard to see stock recover $300 soon.
- i also tend to think the lows could be tested if we get a risk off moment sooner vs. later
- and this isn't a "need to own" in my book at the moment, esp while i'm packing high conviction on obtc, nxt, gamb, tsm and starting to wrangle tsla as of y'day.
- so let's see.
- i won't get *too* greedy. i'm tempted here.

tldr
- but my target is probably in the sub $250 level to start biting and building position

be well my friends, have a good weekend!

V