In 2023, you’d be hard-pressed to find a Wall Street analyst who wasn’t in love with Lululemon. The stock was a classic example of a long-term, buy-and-hold winner, with a strong brand, enviable profit margins, and plenty of expansion opportunities.

However, coming into 2025, the company’s façade started to crack, with revenue growth slowing to single digits and comparable in-store sales falling. It appears the American market may be reaching saturation, with competition hot on Lulu’s heels. On top of that, tariffs are taking a healthy bite out of the bottom line, leaving its EBITDA “on the floor.” The stock is now the worst-performing name on the S&P 500 in 2025.

That said, international markets—particularly in China—remain vibrant, and Lulu hopes to reinvigorate domestic sales through R&D innovation. Is the market’s pricing an overreaction, or a reasonable adjustment for a brand transitioning from growth to value?

Mike also touches on Microsoft’s agreement with recent IPO Nebius, which sent the stock soaring.

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