Is lululemon athletica, Inc. overvalued or undervalued?

As of 17 October 2025, lululemon athletica, Inc. moved from fair to attractive in its valuation grade, indicating a shift towards being undervalued. The company is currently assessed as undervalued, supported by a P/E ratio of 18, an EV to EBITDA of 11.20, and a PEG ratio of 1.03. In comparison, eBay, Inc. has a significantly higher P/E ratio of 70.51, highlighting lululemon's relative attractiveness in its sector.
Despite its attractive valuation, lululemon has faced significant challenges, as evidenced by its year-to-date return of -56.22%, which starkly contrasts with the S&P 500's return of 13.30% over the same period. This underperformance may suggest market skepticism regarding the company's future growth prospects, despite its strong financial metrics such as a ROCE of 73.99% and ROE of 42.88%.