Is lululemon athletica, Inc. overvalued or undervalued?

As of 4 September 2025, lululemon athletica, Inc. has moved from a very attractive to an attractive valuation grade. The company appears to be overvalued, given its P/E ratio of 18, which is significantly higher than the peer average of 11.49, and a Price to Book Value of 7.73. Additionally, the EV to EBITDA ratio stands at 11.20, indicating a premium compared to its peers.
In comparison to eBay, Inc., which has a P/E of 70.51 and an EV to EBITDA of 53.28, lululemon's ratios suggest it is relatively more expensive despite its strong ROCE of 73.99% and ROE of 42.88%. The recent stock performance shows that lululemon has underperformed against the S&P 500 across multiple periods, with a year-to-date return of -55.61% compared to the S&P 500's 12.22%, reinforcing the notion that the stock may be overvalued.