AC Investment Research

LULU lululemon athletica inc. Common Stock Research Report

Outlook: lululemon athletica inc. Common Stock assigned short-term Ba1 & long-term Ba1 estimated rating.
Dominant Strategy : Hold
Time series to forecast n: 24 Dec 2022 for (n+1 year)
Methodology : Supervised Machine Learning (ML)

Abstract

This paper tries to address the problem of stock market prediction leveraging artificial intelligence (AI) strategies. The stock market prediction can be modeled based on two principal analyses called technical and fundamental. In the technical analysis approach, the regression machine learning (ML) algorithms are employed to predict the stock price trend at the end of a business day based on the historical price data. In contrast, in the fundamental analysis, the classification ML algorithms are applied to classify the public sentiment based on news and social media.(Choudhry, R. and Garg, K., 2008. A hybrid machine learning system for stock market forecasting. International Journal of Computer and Information Engineering, 2(3), pp.689-692.) We evaluate lululemon athletica inc. Common Stock prediction models with Supervised Machine Learning (ML) and Ridge Regression1,2,3,4 and conclude that the LULU stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Hold

Key Points

  1. Market Signals
  2. What are main components of Markov decision process?
  3. What is a prediction confidence?

LULU Target Price Prediction Modeling Methodology

We consider lululemon athletica inc. Common Stock Decision Process with Supervised Machine Learning (ML) where A is the set of discrete actions of LULU stock holders, F is the set of discrete states, P : S × F × S → R is the transition probability distribution, R : S × F → R is the reaction function, and γ ∈ [0, 1] is a move factor for expectation.1,2,3,4


F(Ridge Regression)5,6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Supervised Machine Learning (ML)) X S(n):→ (n+1 year) i = 1 n s i

n:Time series to forecast

p:Price signals of LULU stock

j:Nash equilibria (Neural Network)

k:Dominated move

a:Best response for target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do AC Investment Research machine learning (predictive) algorithms actually work?

LULU Stock Forecast (Buy or Sell) for (n+1 year)

Sample Set: Neural Network
Stock/Index: LULU lululemon athletica inc. Common Stock
Time series to forecast n: 24 Dec 2022 for (n+1 year)

According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Hold

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

IFRS Reconciliation Adjustments for lululemon athletica inc. Common Stock

  1. A firm commitment to acquire a business in a business combination cannot be a hedged item, except for foreign currency risk, because the other risks being hedged cannot be specifically identified and measured. Those other risks are general business risks.
  2. An entity's business model refers to how an entity manages its financial assets in order to generate cash flows. That is, the entity's business model determines whether cash flows will result from collecting contractual cash flows, selling financial assets or both. Consequently, this assessment is not performed on the basis of scenarios that the entity does not reasonably expect to occur, such as so-called 'worst case' or 'stress case' scenarios. For example, if an entity expects that it will sell a particular portfolio of financial assets only in a stress case scenario, that scenario would not affect the entity's assessment of the business model for those assets if the entity reasonably expects that such a scenario will not occur. If cash flows are realised in a way that is different from the entity's expectations at the date that the entity assessed the business model (for example, if the entity sells more or fewer financial assets than it expected when it classified the assets), that does not give rise to a prior period error in the entity's financial statements (see IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors) nor does it change the classification of the remaining financial assets held in that business model (ie those assets that the entity recognised in prior periods and still holds) as long as the entity considered all relevant information that was available at the time that it made the business model assessment.
  3. A contractually specified inflation risk component of the cash flows of a recognised inflation-linked bond (assuming that there is no requirement to account for an embedded derivative separately) is separately identifiable and reliably measurable, as long as other cash flows of the instrument are not affected by the inflation risk component.
  4. The significance of a change in the credit risk since initial recognition depends on the risk of a default occurring as at initial recognition. Thus, a given change, in absolute terms, in the risk of a default occurring will be more significant for a financial instrument with a lower initial risk of a default occurring compared to a financial instrument with a higher initial risk of a default occurring.

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

Conclusions

lululemon athletica inc. Common Stock assigned short-term Ba1 & long-term Ba1 estimated rating. We evaluate the prediction models Supervised Machine Learning (ML) with Ridge Regression1,2,3,4 and conclude that the LULU stock is predictable in the short/long term. According to price forecasts for (n+1 year) period, the dominant strategy among neural network is: Hold

LULU lululemon athletica inc. Common Stock Financial Analysis*

Rating Short-Term Long-Term Senior
Outlook*Ba1Ba1
Income StatementBaa2Baa2
Balance SheetBaa2B1
Leverage RatiosBa3Baa2
Cash FlowCBaa2
Rates of Return and ProfitabilityBaa2Caa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Prediction Confidence Score

Trust metric by Neural Network: 82 out of 100 with 760 signals.

References

  1. Çetinkaya, A., Zhang, Y.Z., Hao, Y.M. and Ma, X.Y., Can stock prices be predicted?(SMI Index Stock Forecast). AC Investment Research Journal, 101(3).
  2. Vapnik V. 2013. The Nature of Statistical Learning Theory. Berlin: Springer
  3. Gentzkow M, Kelly BT, Taddy M. 2017. Text as data. NBER Work. Pap. 23276
  4. Wager S, Athey S. 2017. Estimation and inference of heterogeneous treatment effects using random forests. J. Am. Stat. Assoc. 113:1228–42
  5. M. Babes, E. M. de Cote, and M. L. Littman. Social reward shaping in the prisoner's dilemma. In 7th International Joint Conference on Autonomous Agents and Multiagent Systems (AAMAS 2008), Estoril, Portugal, May 12-16, 2008, Volume 3, pages 1389–1392, 2008.
  6. Christou, C., P. A. V. B. Swamy G. S. Tavlas (1996), "Modelling optimal strategies for the allocation of wealth in multicurrency investments," International Journal of Forecasting, 12, 483–493.
  7. Clements, M. P. D. F. Hendry (1995), "Forecasting in cointegrated systems," Journal of Applied Econometrics, 10, 127–146.
Frequently Asked QuestionsQ: What is the prediction methodology for LULU stock?
A: LULU stock prediction methodology: We evaluate the prediction models Supervised Machine Learning (ML) and Ridge Regression
Q: Is LULU stock a buy or sell?
A: The dominant strategy among neural network is to Hold LULU Stock.
Q: Is lululemon athletica inc. Common Stock stock a good investment?
A: The consensus rating for lululemon athletica inc. Common Stock is Hold and assigned short-term Ba1 & long-term Ba1 estimated rating.
Q: What is the consensus rating of LULU stock?
A: The consensus rating for LULU is Hold.
Q: What is the prediction period for LULU stock?
A: The prediction period for LULU is (n+1 year)

People also ask

What are the top stocks to invest in right now?
Stock Forecast