lululemon athletica inc. (NASDAQ:LULU)

Market (fair) value of lululemon

Over the observed periods, the market value exhibited notable fluctuations. Starting at approximately 26.9 billion USD in early 2020, it increased sharply to around 42.1 billion USD by early 2021. Subsequent growth was more moderate, reaching nearly 44.9 billion USD in early 2022. However, the value then decreased to about 41.8 billion USD in early 2023, followed by a substantial rise to approximately 61.7 billion USD in early 2024. The last recorded value in early 2025 showed a significant decline to roughly 42.8 billion USD. This pattern suggests periods of strong investor confidence interspersed with corrections or market adjustments.

Invested capital

Invested capital consistently increased throughout the time frame, indicating continual commitments to business operations and growth. Beginning at approximately 3.0 billion USD in early 2020, invested capital rose steadily each year to reach nearly 6.5 billion USD by early 2025. The magnitude of increase accelerated in later years, particularly between early 2023 and early 2025, implying intensified investment activity or asset acquisition.

Market value added (MVA)

Market value added, derived as the difference between market value and invested capital, followed a dynamic trajectory similar to market value but with slight variations. It started at approximately 23.9 billion USD in early 2020 and peaked at around 38.5 billion USD in early 2021. While it remained relatively elevated through early 2022 at about 41.0 billion USD, it then declined to roughly 37.3 billion USD in early 2023. A significant increase occurred in early 2024 to approximately 55.8 billion USD, before dropping to about 36.3 billion USD in early 2025. These fluctuations reflect changing perceptions of the company’s value creation above the capital invested over time.

The financial data reveals trends in market value added (MVA), invested capital, and the MVA spread ratio over a six-year period. These metrics provide insight into value creation relative to the capital invested in the business.

Market Value Added (MVA)

The MVA demonstrates fluctuations, with a significant increase from approximately $23.9 billion in early 2020 to a peak of about $40.97 billion in early 2022. This was followed by a decline in 2023 to around $37.3 billion, then a notable rise again in 2024 reaching roughly $55.8 billion, the highest in the period. However, in 2025, MVA declined sharply to approximately $36.3 billion. This volatility suggests variations in investor perceptions and company valuation over time.

Invested Capital

Invested capital shows a consistent upward trajectory throughout the six years. Starting at about $3.0 billion in early 2020, it increased steadily each year, reaching roughly $6.5 billion by early 2025. This steady growth indicates ongoing investment in the company's assets, operations, or strategic initiatives.

MVA Spread Ratio

The MVA spread ratio, reflecting the relationship between market value added and invested capital, exhibits a pattern of increase followed by decline. It rose sharply from 793.45% in 2020 to peak levels above 1047% in 2021 and 2022. Subsequently, there was a decline to around 823% in 2023, a partial recovery to approximately 933% in 2024, and a further drop to 557.37% in 2025. This trend indicates that the efficiency or premium over invested capital in creating market value improved notably up to 2022 but weakened significantly thereafter.

Overall, the company displayed strong growth in both market valuation and invested capital over the period, although the relative market value creation efficiency, as measured by the MVA spread ratio, peaked in the early part of the period and has since seen a downward trend. This suggests that while investments have increased, the market premium or perceived value added per unit of invested capital has decreased in recent years.

Market Value Added (MVA)

The market value added shows significant fluctuations over the analyzed periods. Initially, there is a notable increase from approximately 23.87 billion USD in early 2020 to about 38.46 billion USD in early 2021. This upward trend continues moderately to around 40.97 billion USD in early 2022. However, the value declines to approximately 37.28 billion USD by early 2023, then rises sharply to 55.76 billion USD in early 2024, before dropping again to roughly 36.27 billion USD in early 2025. These variations indicate volatile investor perception or valuation changes across the years.

Adjusted Net Revenue

The adjusted net revenue demonstrates consistent and strong growth throughout the six-year span. Starting at about 4 billion USD in early 2020, the revenue increases steadily each year, reaching approximately 10.59 billion USD in early 2025. This steady upward trajectory suggests an expanding operational scale or increasing sales performance over time.

MVA Margin

The MVA margin, representing the market value added relative to net revenue, exhibits a highly volatile pattern. It begins at 596.68% in early 2020 and rises sharply to a peak of 866.84% in early 2021. Subsequently, the margin declines to 649.4% in early 2022 and decreases more substantially to 457.15% in early 2023. A recovery is observed in early 2024, with the margin increasing to 576.4%, but this is followed by a significant drop to 342.49% in early 2025. This volatility suggests fluctuating market expectations or changing profitability relative to revenue.

Overall Analysis

In summary, the data reflect robust revenue growth consistent over the periods, implying successful business expansion or enhanced revenue generation capabilities. Contrarily, the market value added and its margin relative to revenue exhibit considerable variability, indicating shifts in market valuation or investor sentiment that are not always aligned with the steady revenue increases. This divergence may point to external market factors, changes in profit margins, or other dynamics affecting valuation beyond operational performance alone.