Should you bet on Lulu’s Fashion (NASDAQ:LVLU) stock?

If penny stocks appeal to you, consider using TipRanks Penny Stocks Screener to zoom in on those with a higher possibility of beating the benchmark. Using the Screener, we shortlisted Lulu’s Fashion Lounge Holdings (NASDAQ: LVLU) stock with a smart outperform score on TipRanks. Additionally, analyst price targets show strong upside potential.

Here’s what makes Lulu’s fashion stock appealing

Lulu’s fashion stock has lost around 50% of its value since the start of the year. This decline reflects the overall normalization of e-commerce spending trends amid economic reopening and macroeconomic challenges. However, what sets this online retailer of women’s clothing, shoes and accessories apart is the continued momentum of its core business.

Despite the challenges, Lulu’s revenue continues to grow at a double-digit rate. It was up 27% in Q2, reflecting strong demand and growth in its active customer base and order value.

Its active customer base reached 3.2 million in the second quarter, up 52.6% year-on-year. At the same time, the average order value increased by 13.2%.

LVLU’s management is confident about the company’s long-term prospects. Its CEO, David McCreight, expects the company’s strong balance sheet and strategic initiatives to help it navigate a weak macroeconomic environment.

Meanwhile, for fiscal 2022, LVLU expects revenue to grow 17.1% to 27.8% year-over-year.

Is LVLU a good stock to buy?

On TipRanks, LVLU stock commands a strong buy consensus rating based on six buy recommendations and one hold recommendation. Moreover, the average price target of $13 implies an upside potential of 161.6%.

While 3.4% of investors holding portfolios on TipRanks reduced their exposure to LVLU shares in a month due to macroeconomic weakness, it boasts a smart outperformance score of nine out of 10.

Conclusion

LVLU’s strong performance amid multiple headwinds (like normalizing e-commerce spending, supply issues, and inflation) supports the bullish scenario for the stock. However, the company is not immune to weak macroeconomic headwinds and its stock could come under pressure in the near term.

Also, before investing in a penny stock, I recommend investors read more here: Are Penny Stocks a Good Investment?

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