Lululemon Valuations Drop to 2010 Levels Amid Breakout and Burry's Interest

Lululemon Athletica Inc (LULU) is trading at levels not seen since 2010, attracting value investors and momentum traders. Hedge fund billionaire Michael Burry has added 50,000 LULU shares to his portfolio, signaling a bullish signal. Despite a 43.35% return on equity and over $1.3 billion in cash on hand, Lululemon shares are cheap. With valuations at 15-year lows, breakout momentum building, and Burry backing the trade, Lululemon looks set for a potential run higher.

Lululemon Athletica Inc (LULU) is currently trading at levels not seen since 2010, making it an attractive proposition for both value investors and momentum traders. The company's stock has been trading at a significant discount, with valuations at 15-year lows, and a breakout momentum is building. These factors, combined with a notable investment from hedge fund billionaire Michael Burry, suggest that Lululemon Athletica Inc could be poised for a potential run higher.

Michael Burry, renowned for his prescient bets against the housing market prior to the 2008 financial crisis, has added 50,000 shares of LULU to his portfolio. This move, disclosed in his latest 13F filing, signifies a bullish signal for the stock. Burry's investment strategy is known for its focus on identifying undervalued opportunities, and his addition of LULU shares suggests that he believes the stock is currently undervalued [2].

Despite the recent decline in stock price, Lululemon Athletica Inc continues to perform strongly financially. The company reported a 43.35% return on equity for the latest quarter, and it holds over $1.3 billion in cash on hand. These financial metrics indicate that the company is in a strong position to capitalize on any potential market upturn.

Several hedge funds and institutional investors have also increased their stakes in Lululemon Athletica Inc during the first quarter of 2025. American Century Companies Inc., for instance, increased its holdings by 12.1% during the same period, owning 1.3 million shares valued at approximately $368.3 million [1]. Other notable investors, such as Twin Capital Management Inc. and Narwhal Capital Management, have also boosted their positions in the stock.

The consensus rating among Wall Street analysts for Lululemon Athletica Inc is a "Moderate Buy" with an average target price of $327.15. However, the stock's recent performance and the addition of LULU shares by Michael Burry suggest that there could be further upside potential.

In conclusion, Lululemon Athletica Inc's current trading levels, combined with its strong financial performance and the notable investment by Michael Burry, make it an attractive option for investors. The stock's 15-year low valuations and the building momentum indicate that LULU could be poised for a potential run higher.

References:
[1] https://www.marketbeat.com/instant-alerts/filing-american-century-companies-inc-boosts-holdings-in-lululemon-athletica-inc-nasdaqlulu-2025-08-15/
[2] https://finance.yahoo.com/news/michael-burrys-strategic-move-lululemon-152131158.html