Lululemon Athletica Inc., together with its subsidiaries, designs, distributes, and retails athletic apparel, footwear, and accessories under the lululemon brand for women and men. It operates in two segments, Company-Operated Stores and Direct to Consumer. The company offers pants, shorts, tops, and jackets for healthy lifestyle, such as yoga, running, training, and other activities. It also provides fitness- inspired accessories and footwear. The company sells its products through a chain of company-operated stores; outlets; interactive workout platform; yoga and fitness studios, university campus retailers, and other partners; license and supply arrangements; recommerce; and temporary locations, as well as through mobile apps and lululemon.com e-commerce website. It has operations in the United States, the People's Republic of China, Canada, Australia, the United Kingdom, South Korea, Germany, New Zealand, Singapore, Japan, France, Ireland, Spain, Malaysia, Sweden, the Netherlands, Norway, and Switzerland. The company was founded in 1998 and is based in Vancouver, Canada.

lululemon athletica inc.

Key Points
Lululemon is seeking a new CEO to revitalize its U.S. business.
U.S. comparable sales have been slumping, and profits are in decline.
The search for Lululemon's (NASDAQ: LULU) next CEO is getting messy. Not only was there no clear succession plan when CEO Calvin McDonald announced his impending resignation, but activist investor Elliot Investment Management has built a stake and is pushing a specific pick, and founder Chip Wilson is looking to replace board members before a decision is made.
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All of this will be behind the company at some point next year, and the next CEO will then have the task of returning the core U.S. business to growth. While it will take time for any new strategy to take hold, Lululemon stock could surge in 2026 if the new CEO can spin a compelling turnaround story.
Squandering a strong brand
Lululemon is thriving in international markets, but the story is different in the U.S. Comparable sales in the Americas fell by 5% in the third quarter, and overall profits are in decline.
Lululemon allowed its core products to become stagnant as competition intensified. Activewear shoppers have far more choices today than they did a few years ago, and Lululemon hasn't done enough to adapt. Prior to McDonald's resignation, he announced a plan to decrease product development times and refresh the core portfolio for next spring.
The good news is that Lululemon's business is not broken. Lululemon's brand is a powerful force in the apparel market, and customers will likely come back if the company can get its product mix right. That will take time, especially with a potentially drawn-out CEO search process underway.
A stock recovery in 2026 is possible, although the business may not stage a clear comeback until 2027. However, with Lululemon stock trading for around 16 times full-year earnings guidance, investors are getting a good deal to sit and wait for an iconic brand to find its footing.
Should you buy stock in Lululemon Athletica Inc. right now?
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Timothy Green has positions in Lululemon Athletica Inc. The Motley Fool has positions in and recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Where Will Lululemon Stock Be When the Dust Settles?

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco S&P 500 Equal Weight ETF (Symbol: RSP) where we have detected an approximate $917.3 million dollar outflow -- that's a 1.2% decrease week over week (from 398,930,000 to 394,190,000). Among the largest underlying components of RSP, in trading today Norwegian Cruise Line Holdings Ltd (Symbol: NCLH) is up about 0.4%, Carnival Corp (Symbol: CCL) is up about 0.8%, and lululemon athletica inc (Symbol: LULU) is lower by about 0.6%. For a complete list of holdings, visit the RSP Holdings page » The chart below shows the one year price performance of RSP, versus its 200 day moving average:
Looking at the chart above, RSP's low point in its 52 week range is $150.35 per share, with $195.465 as the 52 week high point — that compares with a last trade of $193.38. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Also see:
KED shares outstanding history
Top Ten Hedge Funds Holding OIA
HMTV Videos
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Notable ETF Outflow Detected - RSP, NCLH, CCL, LULU

lululemon athletica inc.’s LULU third-quarter fiscal 2025 earnings highlight how digital remains a core pillar of its growth strategy, even as the company navigates a more cautious consumer environment. Management emphasized that e-commerce continues to play a critical role in engaging guests, expanding reach and supporting omnichannel momentum, suggesting that lululemon’s digital push is delivering strategic, if uneven, gains.
In the fiscal third quarter, lululemon saw solid digital engagement, supported by improvements across its app, loyalty ecosystem and online merchandising. Management noted that the digital channel remains highly profitable and an important entry point for new customers, particularly younger and international shoppers. Enhancements in product storytelling, personalized marketing and member-led experiences are helping deepen relationships and drive repeat traffic online.
That said, digital growth has moderated compared with the post-pandemic surge, reflecting broader normalization in online shopping and softer demand in North America. Management acknowledged that e-commerce performance has been pressured by higher promotional activity and selective markdowns, which weighed on digital margins. However, improved inventory discipline and better chase capabilities are allowing lululemon to be more responsive online, reducing excess stock and limiting unnecessary discounting.
lululemon continues to view digital and stores as complementary rather than competing channels. The company highlighted strong omnichannel behaviors, with digital tools driving store traffic through buy-online-pickup-in-store, ship-from-store and app-enabled guest engagement. These capabilities are helping lift overall conversion and customer lifetime value, even when pure-play e-commerce growth is modest.
Overall, while lululemon’s digital push may not be delivering explosive top-line growth in the current environment, it is effectively strengthening customer engagement, supporting omnichannel efficiency and reinforcing brand loyalty. As demand stabilizes and international markets scale, digital initiatives appear well-positioned to remain a durable competitive advantage.
Are RL & CROX Matching LULU’s Digital-First Playbook?
With lululemon setting the pace in digital engagement, the spotlight now turns to whether Ralph Lauren Corporation RL and Crocs Inc. CROX are keeping up with similar e-commerce and omnichannel strategies.
Ralph Lauren’s second-quarter fiscal 2026 earnings indicate its digital strategy is gaining traction. Management highlighted double-digit growth across its digital ecosystem, driven by full-funnel activations, improved personalization and strong full-price selling. Digital comps rose 15% in North America, while Asia and Europe posted double-digit digital growth. Investments in AI tools, data analytics and social commerce are strengthening engagement and supporting higher-quality online sales.
Crocs’ third-quarter 2025 earnings show that its digital strategy is resonating, even amid tighter promotions. Management highlighted strong social commerce traction, with Crocs remaining the No. 1 footwear brand on TikTok Shop in the United States. Live-streaming initiatives and global TikTok expansion drove customer acquisition and engagement, helping digital marketplaces offset softer North America DTC trends and reinforcing e-commerce as a key growth lever.
The Zacks Rundown for LULU
lululemon’s shares have gained 19.7% in the past three months against the industry’s decline of 0.1%.
Image Source: Zacks Investment Research
From a valuation standpoint, LULU trades at a forward 12-month price-to-earnings ratio of 16.31X, lower than the industry’s 16.47X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for lululemon’s fiscal 2025 and 2026 earnings implies year-over-year declines of 11% and 1.9%, respectively. Earnings estimates for fiscal 2025 have been northbound in the past 30 days, whereas that for fiscal 2026 has been southbound in the same period.
Image Source: Zacks Investment Research
LULU currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is lululemon's Digital Push Winning Over E-Commerce Customers?

Key Points
Lululemon is searching for a new CEO following a slump in U.S. sales.
An activist investor is already involved, and now the company's founder wants to replace multiple board members.
These developments could prolong the CEO search.
Activewear retailer Lululemon (NASDAQ: LULU) has been struggling to remain relevant in its core U.S. market. The company is facing more competition than ever before, and management has been slow to recognize that its core products have become stale in the eyes of consumers. Comparable sales in the Americas tumbled by 5% in the third quarter, continuing a years-long trend.
Earlier this month, Lululemon announced that CEO Calvin McDonald would step down at the end of January after leading the company since 2018. McDonald will depart without a clear succession plan in place. Instead, the board of directors is currently searching for a permanent replacement.
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An activist investor and the founder enter the fray
About a week after Lululemon announced that McDonald would step down, activist investor Elliot Investment Management disclosed that it had built a stake worth more than $1 billion in the company. Elliot is pushing former Ralph Lauren executive Jane Nielsen as the next CEO, looking to use its stake as leverage to influence the board of directors.
The job of the board became more complicated on Monday when Chip Wilson, the founder of Lululemon and a major shareholder, launched a battle to replace members of the existing board of directors. Wilson views the lack of a succession plan as a failure, stating that shareholders lack confidence in the current board's ability to select the right CEO to replace McDonald.
Wilson has nominated three independent directors, including former On Holding co-CEO Marc Maurer, former ESPN CMO Laura Gentile, and former Activision CEO Eric Hirshberg. The picks would bring substantial product experience to the board, with Maurer a particularly strong choice given On Holding's blockbuster growth in the global footwear market.
Wilson's efforts are independent of Elliot's, but it's possible the two could team up to force change at Lululemon.
What does this mean for Lululemon stock?
Shares of Lululemon have been struggling for the past two years. The stock is down about 58% from its all-time high, and that's after a rally driven by the news of McDonald's upcoming resignation.
While Wilson's involvement in the CEO search process complicates everything and could delay the process, Lululemon needs a CEO who is able and willing to shake up the company and its culture. Product development needs to be faster, and the company must once again create trends rather than follow them.
Ultimately, the pressure on the board from Wilson's push for new directors and Elliot's push to influence the CEO choice seems likely to result in a better choice, even if the process takes longer. For long-term investors who view Lululemon as a strong brand that's lost its way, these are positive developments that raise the odds of a stock price recovery.
Should you buy stock in Lululemon Athletica Inc. right now?
Before you buy stock in Lululemon Athletica Inc., consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lululemon Athletica Inc. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $507,744!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,153,827!*
Now, it’s worth noting Stock Advisor’s total average return is 984% — a market-crushing outperformance compared to 195% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of December 30, 2025.
Timothy Green has positions in Lululemon Athletica Inc. The Motley Fool has positions in and recommends Lululemon Athletica Inc. and On Holding. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Lululemon's CEO Search Just Got More Complicated

lululemon athletica inc. LULU gained momentum, with its shares rising 14.5% in the past month. The stock’s momentum led it to outperform the Textile - Apparel industry’s growth of 3.1% and the Consumer Discretionary sector’s 0.6% return in the past month. The stock has also outpaced the S&P 500’s rise of 1.7% in the same period.
The LULU stock’s momentum was particularly notable following the company’s better-than-expected third-quarter fiscal 2025 results, driven by gains in the international business. Additionally, the company’s raised fiscal 2025 outlook boosted investor sentiment on the stock.
LULU’s 1-Month Price Performance
Image Source: Zacks Investment Research
lululemon’s performance is significantly stronger than that of G-III Apparel Group GIII, which rose 3.1% in the past month. The stock also outperformed Guess Inc. GES and Ralph Lauren Corporation’s RL declines of 1.8% and 2.1%, respectively, in the past month.
At the current share price of $208.97, lululemon trades 31.2% above its 52-week low of $159.25. Meanwhile, the LULU stock’s price is 50.6% below its 52-week high of $423.32. The stock trades above its 50-day moving average, indicating a bullish near-term sentiment.
LULU Stock Trades Above 50-Day Moving Average
Image Source: Zacks Investment Research
What’s Bolstering the LULU Stock’s Performance?
lululemon’s stock performance is supported by a combination of resilient execution, strong international momentum and a clearly articulated path to reaccelerate growth in 2026. In the third quarter of fiscal 2025, the company delivered better-than-expected earnings and revenues, reflecting solid demand for innovation-led products and disciplined expense management despite ongoing macro and tariff pressures.
A key pillar bolstering investor confidence is lululemon’s international growth engine, particularly in Mainland China, where revenue growth remained robust and market share continued to expand across city tiers. Strong performance in outerwear, core franchises and digital activations highlights the scalability of the brand outside North America and provides a durable growth runway beyond fiscal 2025.
Another supportive factor is the company’s detailed action plan to influence its U.S. business. Management outlined three clear pillars — product creation, product activation and enterprise efficiency — aimed at refreshing assortments, improving speed to market, and elevating in-store and digital experiences.
Equally important is the company’s fiscal 2025 outlook. LULU anticipates net revenues of $10.96-$11.05 billion for fiscal 2025 compared with the $10.85-$11 billion stated earlier. The company projects an EPS of $12.92-$13.02, suggesting an increase from the $14.64 reported in fiscal 2024. The revised EPS view marks an increase from the $12.77-$12.97 projected earlier.
Management expects the most meaningful benefits of its U.S. turnaround plan to materialize in fiscal 2026, driven by higher new-style penetration, faster product development cycles and improved store and digital activation. The company plans to increase newness penetration to about 35% in spring 2026, refresh key franchises and better align assortments with local demand, initiatives aimed at reigniting traffic and improving full-price sell-through.
While management acknowledged that fiscal 2026 margins would face pressure from tariffs and reinvestments, it also emphasized multi-year efficiency efforts, disciplined inventory management and productivity gains to support long-term profitability. Importantly, lululemon enters fiscal 2026 with a debt-free balance sheet, strong cash flow and ample share repurchase capacity, allowing it to invest through near-term headwinds.
Taken together, confidence in fiscal 2026 product-led inflection, sustained international momentum and financial flexibility is reinforcing investor optimism and helping propel lululemon’s stock.
Here’s How Estimates Are Shaping Up for LULU
The Zacks Consensus Estimate for lululemon’s fiscal 2025 EPS has increased 1% in the past 30 days. The upward revision in earnings estimates indicates that analysts are optimistic about the company’s near-term growth potential. Meanwhile, the EPS estimate for fiscal 2026 declined 0.5% in the past seven days.
For fiscal 2025, the Zacks Consensus Estimate for LULU’s revenues implies 4.5% year-over-year growth, while the EPS estimate suggests an 11% decline. The consensus mark for fiscal 2026 revenues indicates 4.4% year-over-year growth, while the earnings estimate suggests a 1.9% decline.
Image Source: Zacks Investment Research
LULU’s Valuation Picture
lululemon’s current forward 12-month price-to-earnings (P/E) multiple is 16.31X. This multiple is lower than the industry average of 16.47X and the S&P 500’s average of 23.44X, making the stock appear relatively cheap.
The company is trading at a lower valuation than some of its competitors. Its peer, Ralph Lauren, trades at a higher forward 12-month P/E multiple of 21.81X. However, some peers like G-III Apparel and Guess look relatively cheap. G-III Apparel and Guess have forward 12-month P/E ratios of 9.94X and 9.65X, respectively, significantly lower than that of LULU.
Image Source: Zacks Investment Research
Are There Headwinds in LULU’s Path?
lululemon faces several headwinds that could temper its growth trajectory. Management highlighted ongoing softness in the North America business, wherein traffic remains pressured amid cautious discretionary spending. Elevated promotional intensity across the apparel space and a slower recovery in core women’s categories are weighing on comparable sales, making near-term demand visibility less certain.
Margin pressures also loom in the path ahead. The company expects fiscal 2026 gross margin headwinds from tariffs, higher input costs and incremental investments to reignite U.S. growth. While productivity initiatives are underway, management acknowledged that benefits will take time to fully materialize, creating an execution-sensitive period as lululemon balances reinvestment with profitability.
Should Investors Buy LULU Stock?
Overall, sentiment around lululemon’s stock remains constructive, supported by solid execution, encouraging international momentum and improving near-term earnings expectations. The recent upward revision in estimates reflects growing confidence in management’s strategy, particularly its ability to stabilize the U.S. business while sustaining growth in the international markets. Investors also appear reassured by the company’s clear roadmap toward a product-led reacceleration and its strong financial position, which provides flexibility to invest despite uncertainty.
However, the stock’s relatively cheap valuation may also be signaling some inbuilt challenges. Ongoing pressure in North America, margin headwinds tied to reinvestments and tariffs, and the need for flawless execution in the planned turnaround could weigh on performance in the interim. While these factors warrant caution, they do not undermine the long-term brand strength and strategic potential.
Given the balanced mix of positives and risks, holding the stock with a long-term perspective appears prudent for investors willing to ride through near-term volatility. The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

lululemon Stock Jumps 14% in a Month: Buy the Rally or Hold Tight?

After a period marked by uneven demand, channel imbalances and pressure on its core franchises, NIKE Inc. NKE is turning to “Sport Offense” as the central lever to reset momentum. The strategy represents a deliberate shift back to sport-led, athlete-driven innovation, organizing the business around key sports, cities and athletes rather than broad lifestyle narratives. By anchoring product creation, storytelling and marketplace execution more tightly to sport moments, the company aims to rebuild brand heat, restore premium positioning and create a more consistent pipeline of newness across footwear, apparel and equipment.
Early signals suggest the approach is gaining traction, particularly in North America, where performance categories like Running and Basketball are leading growth. The Sport Offense emphasizes faster innovation cycles, clearer segmentation by sport and price point, and tighter collaboration with wholesale partners to elevate in-store and digital experiences. This has helped NIKE improve sell-through, reduce excessive promotions and rebalance its portfolio away from overextended classic franchises. Importantly, the model is designed to scale, allowing successful concepts in one market or sport to be replicated across geographies and channels with greater speed and relevance.
That said, execution risks remain, especially in international markets. Greater China, in particular, faces a longer reset as NIKE works to reassert its premium, innovation-led identity in a highly competitive and digital-first environment. EMEA and APLA are also at earlier stages of adopting the Sport Offense framework, meaning results will likely be uneven in the near term. Still, if NIKE can consistently translate sport-driven innovation into localized, compelling consumer experiences, the Sport Offense has the potential to reaccelerate growth, strengthen brand equity and lay the foundation for more sustainable, profitable expansion across key global markets.
NKE’s Competition in the Global Arena
adidas AG ADDYY and lululemon athletica inc. LULU are the key companies competing with NIKE in theglobal market
adidas is sharpening its focus on performance-led categories as it works to reaccelerate growth and rebuild brand momentum across key markets. The company is leaning more heavily into core sports such as football, running and training, using athlete partnerships and major global sporting events to reignite product relevance and consumer excitement. By streamlining its product portfolio, reducing discount dependency and tightening control over distribution, adidas aims to restore a premium brand posture while improving sell-through and margins.
lululemon continues to build on its performance DNA by anchoring growth in technical innovation, community-led engagement and category expansion beyond yoga. The brand’s focus on high-performance fabrics, fit and functionality supports strong pricing power and loyalty, while initiatives in running, training and men’s wear broaden its addressable market. At the same time, lululemon is carefully scaling internationally and enhancing its digital and experiential ecosystem to deepen consumer connections.
NKE’s Price Performance, Valuation & Estimates
Shares of NIKE have lost 12.6% in the past three months compared with the industry’s decline of 11.4%.
Image Source: Zacks Investment Research
From a valuation standpoint, NKE trades at a forward 12-month price-to-earnings ratio of 29.31X compared with the industry’s average of 26.36X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NKE’s fiscal 2026 earnings implies a year-over-year decline of 27.3%, while that for fiscal 2027 indicates growth of 55.5%.
Image Source: Zacks Investment Research
NIKE stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Adidas AG (ADDYY) : Free Stock Analysis Report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Can NIKE's "Sport Offense" Reignite Growth Across Key Markets?

Did Disney Win or Lose the OpenAI Deal?

In this podcast, Motley Fool contributors Jon Quast, Dan Caplinger, and Jason Hall talk about stocks.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
A full transcript is below.
Should you buy stock in Airbnb right now?
Before you buy stock in Airbnb, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Airbnb wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $509,470!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,167,988!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 196% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of December 29, 2025.
This podcast was recorded on Dec. 18, 2025.
Jason Hall: Do you still have some items to buy on your holiday shopping list? What about your holiday stock shopping list? Today is Thursday, December 18. Welcome to Motley Fool Money. I'm your host today, Jason Hall, and I'm joined by Motley Fool analysts Dan Caplinger and Jon Quast to discuss some of our favorite hidden gem stocks that look like great buys as 2025 comes to a close. Get ready for a fun, Foolish round table discussion. If I say hidden gems, you probably think I'm talking about small esoteric companies that nobody's ever heard of, right?. That's true. But it's not the only place that you can find hidden gems. On today's show, we have three giants and their respective industries. Airbnb is one of those dominant companies, and Jon, you brought it to the table. It's a name that people think of when describing the entire short-term stays industry now. It's become the verb, too. Since the first day of trading post IPO, the stock's up almost double, but it peaked like a month later, and it's way down since then in early 2021. Jon, why is this on your list as a hidden gem stock worth buying?
Jon Quast: Well, let me give you my elevator pitch here for Airbnb to start it off. People aren't giving up this short-term rental model. Airbnb is the dominant player in this space, and I think it has a brand mote, and it's printing cash, like few companies do. Eventually, these factors should make Airbnb stock a winner. I know it hasn't performed great in recent years, but I think that it will eventually catch up. Let's talk about one of the traits I like of a hidden gem, and that's reasonable growth in an expanding market. Airbnb is growing its revenue at a double-digit pace, 10% in the most recent quarter, expecting high single-digit in the upcoming quarter. But it's not red hot, but that is reasonable growth. There's market research pointing to ongoing growth in this space as a whole. Airbnb is one of the third parties that puts out reports on this. What's so interesting to me is that Airbnb has showed that there are rental property owners who are willing to put their listing on multiple platforms, and that's the majority. But if you're only listing exclusively, you're not listing with Airbnb's competitors. You're listing on Airbnb exclusively. It's either Airbnb alone or Airbnb plus, but never without Airbnb. That to me, shows the mot here, and one of the reasons I like it in this expanding market.
Jason Hall: There's more you like, too.
Jon Quast: For sure. I also like companies that exhibit this trait of having this relentless drive and curiosity to finding new business opportunities. Airbnb is definitely one of those. It's invested $200 million this year in experiences and services. When you look at its bookings in the third quarter, half weren't attached to a place to stay. I'm talking about its experiences and services. People stay in a new place, and maybe they'll book an experience on top of that, but half of the experiences now don't have a place attached to it, so they're doing it exclusively for the experience. That's an interesting trend. The company investing in that seems to be paying off. Management's also talked about, hey, we're going to launch a couple new business ideas every single year. This is throwing spaghetti at the wall, for sure, but it has extra cash on hand, so it can't afford to invest in these new ideas you look at the whole thing. It trades at 18 times its free cash flow. That's a valuation I can get behind. It's buying back shares, and the share count is coming down, and it's investing in new opportunities. Here's the thing. Its competitive position does afford investors the luxury of patience. If it was being outcompeted, if it was burning cash, you wouldn't have the ability to be very patient here. But because it is so strong, you can be patient while it waits for some of these new ideas to work out.
Jason Hall: Jon, I'm a little less convinced that optionality is going to lead to that next leg of growth. But the core business is a wonderful business. You mentioned the valuation, and that says that other investors don't necessarily think it's a wonderful business. Maybe some margin of safety there. Plus, or maybe interest rates falling a catalyst for the business moving forward, too? We'll find out about that, but, Dan, you say there's something else that stands out to you.
Dan Caplinger: There's a couple of things. One is that co-founder CEO Brian Chesky has done a great strategy where he is actually living in a different Airbnb property. It's like on a weekly basis or every couple of weeks, something like that. As I get older, as I start to travel more, I'm finding that is more appealing an idea for me, as well. I think that that may actually resonate with some older travelers as they get to a point where they're thinking about retirement, have more time to spend on the road. Just suddenly, that hotel mindset, it's just different from what you get from an Airbnb. I think there's a lot of potential there. The other thing that I have run into in my own travels in the past year is that Airbnbs actually starting to get some cross-listings from traditional hotels. What I was shocked at is the pricing on the hotel rooms on Airbnb is sometimes cheaper than what you get from aggregator sites. I even ran into one situation where it happened to be a Marriott property. I'm a Marriott Bonvoy loyalty member. There was a better price on Airbnb than I could get as a loyalty member. It ticked me off as a loyalty member, but it does speak to the appeal that hotel owners have when they're trying to get as much money as they possibly can. Maxing it out, putting it on all platforms is the smart thing to do. I just never expected a traditional hotel to be so interested in Airbnb. I think that's a potential growth driver, as well.
Jason Hall: See, that's the optionality that I think could be compelling, and it's a little bit of maybe Amazon's ad business on its own platform for inventory. Where there's a lot of competition for consumer goods, and it's the same way for Airbnb. It also says to me that Airbnb, you know what? We're not afraid of the hotel industry. Come, give us some money. Put your properties on our platform. We'll take a little money from you. We're still going to win. Up next, Dan makes the case for Lululemon in the midst of growing competition and a change in the C suite. Stay with us.
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Jason Hall: Welcome back to Motley Fool Money. Over the long term, Lululemon has been a huge winner. It's up more than 15X since going public. But in recent years, it has not been a great investment. Investors have lost money from the peak back in 2023. We can go all the way back to 2020. Beginning of 2020, the stock is still down. The business has lost some of its luster. Dan, what's going on with Lululemon today that makes it compelling to you as a buy?
Dan Caplinger: I've been following Lululemon for a long time, and it's interesting to me how stocks that arguably start out more looking like rule breakers can end up emulating hidden gem style stocks later on. We all know Lululemon yoga apparel business, it changed the retail industry. It opened up an entire new category of these so-called Athlesure products. It brought a new meaning to casual Fridays at the office. It's been instrumental. It's spawned a whole bunch of other specialty retail concepts as well. Business is done really well. But after briefly topping $500 a share, late in 2023, early in 2024, we've seen the stock plunge 70%. Well, what happened? Growth trends slowed. They even reversed in the core North American market. Even now, the company is guarded about its immediate outlook. Seems like it's trying to bottom, but even most recent quarter, we saw same store sales in the North American segment drop. There's a lot of questions about Lululemon right now, but the thing I focus on is we have seen Lululemon be resilient before. Turn back the clock, what, 10, 11 years or so. From around 2012-2014, the stock was down about 50%. What happened? Yoga pants were suddenly see through. We had all these quality control issues. That was exacerbated by some comments from the then CEO, now former CEO and founder, which I won't bother to repeat here, but it took a while for the company to write the ship after that big boondoggle. But the payoff was the stock was a 10 bagger by 2021. Come back to today. Now we're facing a similarly interesting moment. Lululemon just announced its quarterly results earlier this month, but it also said CEO Calvin McDonald is stepping down. Shareholders were happy with that move. More recently, we've seen activist investors come in. Elliott Management has apparently taken $1 billion stake in Lululemon stock has suggested a former Ralph Loren executive named Jane Nelson for the job. Very much the stock in play right now a lot of investors trying to see, is this the thing that breaks Lululemon out of its slump.
Jon Quast: It's so interesting, Dan, that we're going to experience a change here at CEO, and I'm a little bit worried about a new management team coming in here and overcorrecting because I really don't think things are as bad as it appears. I think you have good apparel businesses and bad ones, and bad ones have piling up inventory, and that leads to markdowns, and it leads to a complete disintegration of its profit margins. You look at Lululemon. That's not what's happening. It's a good business. Inventory is fine. Margins are fine. It's just having a slowdown. I'm worried that a new manager could come in here and overcorrect when in reality, it stay the course and do what you need to do to keep appealing to your customers.
Dan Caplinger: I agree with a lot of what you said, Jon, and I will admit, I'm less than convinced that this recent trend of trying to pick up superstar CEOs for consumer goods companies that are going through some temporary problems. I just don't think that's as important as just going back to basics. Let's make some good products. Let's build up a core base of loyal customers, make them feel valued. But here's the thing. Investors have bid down Lululemon stock so far that they're essentially assuming no real chance of successfully reigniting the growth fires here. I'm not that pessimistic. I think somebody new in the corner office might be able to reverse that negative sentiment and get the stock moving in the right direction.
Jason Hall: I think competition is a real threat, but it's also an important reminder that it's a really compelling business. Competitors are not jumping in this to lose money. We've seen other retail or other apparel businesses that have struggled because they lost control of distribution. Lululemon is different because it still has so much control over its distribution footprint. I do think that I agree with both of you that this is less a turnaround and more of a recalibration, but the stock is still priced maybe for more trouble ahead. Up next. We've got one more. I've got a Mag 7 seven stock that I think is more hidden Jim than you might think. Stick with us.
Jason Hall: Welcome back to Motley Fool Money to wrap up today's show. I want to talk about Alphabet, guys.
Dan Caplinger: But what are we talking about here? I thought you said this was a hidden gem. Alphabet, more like hiding in plain sight. This was April, maybe. But now?
Jason Hall: I think that's fair. From the beginning of the year, the stocks up 55%, but that big sell-off during the lows in April, the stock's basically doubled since then, and it's clearly gone from being perceived as a feared loser from AI eroding that ad-driven search business to now one of the expected winners from artificial intelligence. Now, I think it's true. We're seeing it's getting really serious traction with Gemini, its Cloud services business is booming. We've also figured out that the ad business it's actually holding up pretty well, even as we do see search be affected by AI. But I think the reason it makes a cut for me, and of the stocks that we've discussed today, it's the one that I have actually most recently bought. It's because of those things and all of the other things that Alphabet is positioned to win from. Yes, that includes search. That includes AI and the Cloud. But it's basically got a Netflix bolted onto it with YouTube. It's a cool little thing with YouTube is it's a much lower risk content development engine because it shares in the profits with content creators. By the way, it's emerged as one of the largest cable TV companies in the US, too, with YouTube TV. Also, we continue to creep closer to autonomous vehicles becoming a real thing. Waymo is approaching half a million rides a week, and they're aiming to hit one million rides a week really soon. Eventually, that's going to be a big business. It's going to feel like an overnight success, but it will have actually taken 15-20 years to build out.
Jon Quast: Well, I think that's exactly why Alphabet is a hidden gem. It's not because it's undiscovered, but rather because investors tend to think about it one dimensionally, when in reality, as you point out, Jason, this business can win every way from Thursday in so many different ways. As an analyst, I can barely keep up with everything that it is doing and succeeding in. Optionality is a business trait that we can't measure by any valuation metric. There isn't astock screenerthat's going to pull this out, but it's so important from an investing perspective. Just looking at the plethora of past stock market winners, they had that trait, and Alphabet certainly has it, and there are underappreciated optionality aspects of the business.
Dan Caplinger: Jason, kudos to you for making this purchase recently. I think it's always hard when you've seen a stock really take off before you've had a chance to really add to your position. I was fortunate enough. I saw Alphabet as sort of this mispriced under appreciated stock years ago, and I've been adding even as many commentators dismissed the company for missing out on AI, missing out on cloud computing. Well, Alphabet proved that wrong, and now the stock is much more favorably valued than it used to be. There's still potential, though for future gains good on you, Jason.
Jason Hall: Guys, I got one last question to wrap this up. We've talked about three stocks today. Which do you think is the biggest winner in five years? Jon, you go first.
Jon Quast: I hate to say it. Y'all know how much I love Airbnb, but I believe that LuluLemon has the clearest path to doubling in value over the next five years. I think all three of these stocks are really safe. I really do. But LuluLemon, to me, it has a really good balance between its growth rate and its valuation, maybe the most favorable balance between those two factors. For me, it has the nod of the best stock today.
Dan Caplinger: Jason, I've got to say, I agree with Jon 100% and not just because it was my pick. But I have to say this, too, I wish that it would be Alphabet. I wish that Alphabet would be able to outperform LuluLemon over the next five years because I own a lot more Alphabet stock. I think Alphabet is going to do just fine, and I'm really optimistic and hopeful Airbnb might finally catch a break here, start executing well enough, get some appreciation from shareholders, get the stock moving back in the right direction.
Jason Hall: Airbnb just keeps landing on my too-hard pile. The valuation is really compelling. I'm waiting to see more evidence that these other things are going to really help it deliver, and we're going to be rewarded with a higher multiple. Alphabet, this is just about the most expensive multiple on a sales basis it's ever traded for. It's not cheap. There's still all the other things I laid out we're counting on. The market is expecting big things from the company. I agree. I come back to thinking of this group, the highest probability. I agree. I think the best margin of safety, the business that's proven, the business that's a lot stronger than the stock is treating it like. I think that's Lululemon, too. I agree. How about that? All three of us?
Dan Caplinger: It's a first, Jason. I'm not sure that's ever happened before.
Jason Hall: It's either a really good thing or really bad thing Jon?
Jon Quast: This is a shocking development, for sure.
Jason Hall: Guys, this has been a lot of fun. Dan, Jon, thank you both so much for joining me today. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. For Jon Quast, Dan Caplinger, and the entire Motley Fool Money team, I'm Jason Hall. We'll see you tomorrow.
Dan Caplinger has positions in Alphabet and Lululemon Athletica Inc. Jason Hall has no position in any of the stocks mentioned. Jon Quast has positions in Airbnb. The Motley Fool has positions in and recommends Airbnb, Alphabet, and Lululemon Athletica Inc. The Motley Fool recommends Abercrombie & Fitch and Marriott International. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Hidden Gem Stocks to Love at the End of the Year

Key Points
Toast has a sticky business model that resonates with its restaurant customers.
Chipotle is dealing with some short-term struggles but the core business is strong.
Lululemon has a quality business that remains a key player in the athleisure sector.
For long-term investors, focusing on quality stocks is a smart cornerstone strategy for building sustainable wealth. Combining this approach with a disciplined, long-term mindset can allow investors to press on through market volatility, avoid the emotional pitfalls of investing, and harness the full power of compounding returns through the years.
There are plenty of stocks that the market has hit hard recently thanks to investor ire that still look like tempting buys for the long-term. Here are three such names to consider for your portfolio right now.
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1. Toast
Toast (NYSE: TOST) shares are down about 16% over the last six months due to a combination of factors. There's the general concern that investors are feeling about the restaurant space, which is very vulnerable to shifts in consumer spending.
A few months back, an analyst's report highlighted significant price reductions on Toast's software packages for smaller restaurants, which led investors to fear a lack of pricing power or increased competitive pressure. Toast clarified these changes were due to a website glitch and quickly reverted the prices, but the initial news caused the stock to slide.
There are plenty of reasons to like Toast stock though, and consider buying the business on the dip. The company offers an all-in-one, cloud-based technology platform that acts as an operating system for restaurants to handle everything from point-of-sale and payments to payroll, inventory, and marketing.
This integrated system creates significant switching costs for customers that makes them very likely to stick with Toast's services, which also provides the company an economic moat against competitors.
Toast has a substantial runway for growth and only controls a 15% market share in the U.S. restaurant market, but there is a potential for it to expand to millions of locations globally. The company is consistently adding thousands of new locations each quarter and expanding into new areas including enterprise clients, international markets, and adjacent verticals such as grocery stores.
In Q3 2025, Toast reported revenue of $1.63 billion, a 30% year-over-year increase in annual recurring revenue to over $2.0 billion, and a 24% rise in gross payment volume. The company has successfully shifted toward profitability and generated GAAP earnings of $105 million in the quarter. Toast looks like an intriguing buy right now.
2. Chipotle
Chipotle Mexican Grill (NYSE: CMG) shares are down about 40% over the trailing 12 months. A slowdown in customer traffic amid a challenging macro environment and multiple subsequent reductions to its sales forecasts haven't rested well with shareholders.
The most significant factor is a broad pullback in frequency of visits among key consumer groups, especially those with household incomes under $100,000 and the 25-to-35 age demographic. These consumers are facing economic pressures like inflation, the resumption of student loan payments, and slower wage growth that's leading them to eat at home more often.
Chipotle has cut its same-store sales growth forecast for three consecutive quarters in 2025. The company initially projected low-to-mid single-digit growth but now expects a decline in the low single-digit range for the full year.
The fast-casual restaurant chain also faces rising costs for ingredients like beef, but has opted not to fully offset these with aggressive price increases to defend its value proposition against competitors. Unsurprisingly, that strategy has compressed restaurant-level operating margins.
All of these factors are relatively short-term in the context of a multi-year investment in this leading quick service restaurant stock. Chipotle maintains best-in-class unit economics and a strong balance sheet with minimal debt. Digital sales represent a significant portion of revenue (over 36%) and are supported by a large and engaged loyalty program of 40 million members.
For the first nine months of 2025, Chipotle's total revenue totaled $8.94 billion, and net income came to $1.2 billion. Chipotle could be a smart buy on the dip.
3. Lululemon
Lululemon Athletica (NASDAQ: LULU) is down about 45% from where it was trading one year ago. The biggest concern investors likely have about Lululemon is softening demand in the U.S., the company's largest market. It's also the case that cautious consumer spending and new tariffs are significantly impacting gross margins and profits. While the athleisure space in its core markets is more competitive than it was a decade ago, the macro environment and tariffs impacts have broad industrywide implications.
On the plus side, newer international markets, particularly mainland China, are proving to be key growth engines for Lululemon's business. In Q3 2025, international revenue surged 33%, with China growing 46% year-over-year. The company is expanding into new markets like Greece, Austria, Poland, Hungary, Romania, and India in 2026, which offers significant untapped potential outside its core North American base.
Lululemon has a highly loyal customer base and a premium brand image that allows it to maintain high gross margins (around 55-58%) despite competitive pressures. The company is leveraging its Science of Feel technology to innovate and diversify its product lines, and management's goal is to increase new product styles to 35% by spring 2026. Expansion into categories like men's apparel and footwear continues to gain traction as well.
The secular trend of consumers prioritizing health and wellness provides a long-term tailwind that aligns perfectly with Lululemon's lifestyle-oriented products and brand values. The company also remains highly profitable, having raked in $885 million in free cash flow and $1.7 billion in net income over the trailing 12 months alone. The stock's current depressed valuation could prove an attractive entry point for certain long-term investors.
Should you buy stock in Toast right now?
Before you buy stock in Toast, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Toast wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $509,470!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,167,988!*
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*Stock Advisor returns as of December 28, 2025.
Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill, Lululemon Athletica Inc., and Toast. The Motley Fool recommends the following options: short December 2025 $45 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Stocks That Could Bounce Back in 2026

Key Points
SoFi, MercadoLibre, and Lemonade are disrupting traditional financial services with technology.
On is developing its brand globally and gaining a loyal following.
Taiwan Semiconductor has huge tailwinds in AI development.
As the year comes to a close, it's been another double-digit gain for the S&P 500, which is up almost 18% in 2025. The index is up about 80% during the past three years alone, demonstrating why investing in the S&P 500 is such a compelling thesis.
However, you can bring it up a notch by investing in top growth stocks in 2026. There's no way to know whether the market can keep climbing this year and next, but over time, it grows much more often than it contracts. SoFi Technologies (NASDAQ: SOFI), MercadoLibre (NASDAQ: MELI), On Holding (NYSE: ONON), Lemonade (NYSE: LMND), and Taiwan Semiconductor (NYSE: TSM) can supercharge your portfolio this year, but more importantly, they all have incredible long-term opportunities.
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1. SoFi: Disruptive banking
SoFi is a digital bank that's attracting new customers at a fast pace. Not only is it growing quickly, but revenue growth accelerated in the 2025 third quarter to 38% year over year. That's a phenomenal rate for any company, especially a bank, which is typically slow-growing as an industry.
It's a classic fintech company, combining traditional financial services with technology. These are the kinds of services that used to take up a lot of time and visits to bank branches that are now doable with the swipe of a finger. SoFi's niche is its simple-to-use app that's a game changer, and it's one-stop shop approach that makes total financial management available in one place.
SoFi stock is up 79% this year (as of Dec. 26), and it could soar higher in 2026 and beyond.
2. MercadoLibre: Tech powerhouse
MercadoLibre is the leading e-commerce company in Latin America, holding its own against direct competition from Amazon and other global names. Its region is notably underpenetrated, giving it a long runway as it changes the retail narrative. It has also launched complementary fintech services that serve to create a diversified ecosystem of products. That gives it a dominant position and an edge in a growing market.
It's still in high-growth mode, with a 49% year-over-year sales increase (currency neutral) in the third quarter. It's balancing investments in its future with staying comfortably profitable, and it's constantly rolling out new features to attract customers and simplify the buying process. It has a huge growth runway for the foreseeable future.
3. On: The new name in premium activewear
On is a fast-growing activewear brand that's gaining a loyal following. It sells premium products and competes with companies like Nike and Lululemon Athletica, and it's growing much faster than either of them. Its premium pricing leads to high gross margins, and its affluent consumer base is more resilient when under economic pressure.
The brand is still working its way around the world, developing brand awareness, and it's fairly small as compared with its peers. That gives it more room to expand as it builds its business, and it could skyrocket in 2026 and much longer.
4. Lemonade: Insurance technology
Lemonade is a disruptive insurance powerhouse, offering digital services and using artificial intelligence (AI) and machine learning to offer a better product. It has been attracting customers at a rapid pace since launching, but its algorithms are finally working well enough to move toward profitability. From here, management envisions the model becoming extremely efficient and profitable as the company continues to increase revenue.
After years of investor disappointment, Lemonade stock is up nearly 450% during the past three years. However, it's expecting to become profitable on an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis in 2026, and it could climb even higher.
5. Taiwan Semiconductor: Underpinning AI development
Nvidia and hyperscalers like Amazon and Alphabet may get the most attention for their developments in AI, but Taiwan Semiconductor plays a key role in making it happen. It manufactures the chips that are used for AI production, and it's the largest company of its kind. Since it makes chips for all kinds of applications, it's not limited by whatever the trend of the day is, and it can drive tech development in any area, giving it continued growth opportunities.
However, for the sake of a 2026 discussion, it has potent tailwinds as hyperscalers increase AI spend and demand picks up for chips from many of its clients. Expect Taiwan Semi to enjoy more high gains in the coming year and longer.
Should you buy stock in SoFi Technologies right now?
Before you buy stock in SoFi Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SoFi Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $509,470!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,167,988!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 196% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of December 28, 2025.
Jennifer Saibil has positions in Lemonade, MercadoLibre, On Holding, SoFi Technologies, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Amazon, Lemonade, Lululemon Athletica Inc., MercadoLibre, Nike, Nvidia, On Holding, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.