Lululemon Is Valued Like It's 2010—And Burry's Loving It As Stock Breaks Out

Core Viewpoint - Lululemon Athletica Inc is experiencing a resurgence in valuations, trading at levels not seen since 2010, attracting interest from both value investors and momentum traders [1] Valuation Metrics - Lululemon has a return on equity of 43.35%, a price-to-earnings (P/E) ratio of 13.76, and over $1.3 billion in cash, indicating that shares are undervalued at $203.62, significantly below its 200-day moving average of $308.29 [2] Investor Activity - Michael Burry's Scion Asset Management has acquired 50,000 shares of Lululemon, now constituting 16.43% of the fund, which adds credibility to the bullish outlook, with some investors targeting a price of $400 within the next year [3] Technical Analysis - Lululemon has surpassed its eight-day simple moving average (SMA) of $194.71, generating a bullish signal, although it remains below the 20-day, 50-day, and 200-day SMAs [4] Momentum Indicators - The MACD indicator has crossed over the signal line, indicating bullish momentum, while the RSI is at 44.76, suggesting the stock is neither overbought nor oversold, positioning it for potential gains [5] Investment Opportunity - Investors are presented with a rare chance to purchase a premium brand at prices not seen in nearly a decade, with valuations at 15-year lows and increasing breakout momentum [6]