Just a couple years ago, Lululemon Athletica Inc. (NASDAQ:LULU) was sitting on top of the world. Athletic and fitness apparel sales were soaring as the country’s new-found love for healthier lifestyles reached a critical mass, setting the stage for a doubling in the value of LULU stock between its 2014 low and its current price.

What a difference a couple of years can make.

The undertow of interest in exercise clothing is peaking, if it has not yet subsided. Indeed, waning store traffic measured by Dicks Sporting Goods Inc (NYSE:DKS) in the middle of the year prompted CEO Edward Stack to acknowledge a price war was underway — a war that was “unpredictable and, at times, irrational,” pointing to a supply glut.

Dicks’ CEO was hardly the only, or the first, industry expert to see the slowdown though. It was expected as far back as 2016, with Under Armour Inc (NYSE:UAA) and Nike Inc (NYSE:NKE) also pegged as likely victims of the industry slowdown.

To that end, it would be easy to assume Lululemon is aimed directly at a headwind, making LULU stock unownable … particularly at its trailing price-to-earnings ratio of 39.2. What if, however, Lululemon wasn’t in nearly as much trouble as the headlines imply?

That may well be the case.

LULU Stock: Analysts in Agreement

A close inspection of the recent headlines regarding Lululemon Athletica reveals an inordinate number of upgrades. More interesting, though, is the common threads among most of them.

Susquehanna got the latest wave of upgrades going several days ago, with analyst Sam Poser explaining “LULU’s messaging, and product and execution that reflects that messaging, is what lifts LULU above many other companies that make and market lifestyle active wear. Such touchy-feely stuff, combined with improving product and execution, continues to create customer loyalty and will bring long-term profitable growth.”

Just a couple days later, MKM Partners analyst Roxanne Meyer wrote “Longer-term, we see earnings power potential from DTC growth, extended supply chain opportunities and SG&A leverage, and believe our high-end out-year estimates could prove conservative.”

Shortly after MKM upgraded LULU stock, Deutsche Bank analyst Paul Trussell opined “LULU’s international growth pillar continues to reflect one of the company’s most significant opportunities. We think LULU will likely beat 4Q expectations on robust SSS [same store sales] and leverage of expenses.”

And just a few days ago Merrill Lynch analysts observed that Lululemon stores were full during this holiday shopping season without offering any store-wide sales of offering “discounts on popular core items.”

The common threads? Strong same-store sales, strong execution and the maintenance of its premium-pricing image in a competitive environment where discounts are the new norm.

If the themes had only been mentioned once or only by one analyst, they might be dismissible. To hear the same ideas multiple times though — from analysts putting their reputations on the line — perhaps we should take the hint that LULU stock is an impressive stand-out within the stagnating athleisure market.

Indeed, Lululemon only has to keep doing what it’s been doing (and what the analyst community expects the company to do) to validate all the recently rekindled bullishness.

Feeling the Weight of Those Gains

There’s still a key liability in owning Lululemon stock, however. That is, the ridiculous trailing P/E of 39.2 and a similarly uncomfortable forward-looking P/E of 27.7. While investors should always be willing to pay for quality, there are limits. Lululemon stock surpass those limits.

As Tom Taulli put it just a few days ago, “the LULU stock price is already baking in much of the good fundamentals and then some.” Taulli’s final assessment was that LULU stock was too expensive to buy.

Along those same lines, Luke Lango made it clear a week ago that Lululemon stock was apt to be near a ceiling around $81 … an idea that’s tough to dispute, even with just a quick glance at the chart; Lango accurately notes “this rally is nothing new. LULU stock has rallied like this before. And each time, the big rally ended in a big sell-off.” Take a look.

As for how far LULU stock has to fall before it’s a buy again, it’s difficult to say. The Fibonacci retracement lines plotted in the chart above, however, offer some technical context where little technical context is discernible.

After such a red-hot run-up, a pullback to the 38.2% retracement level of $64.50 is plausible, and a retreat to the other Fibonacci retracement line (61.8%) at $54.40 is possible, especially with the rising long-term support line (red) right around there now.

Bottom Line for LULU Stock

Bottom line? As the title explained, this is arguably a fine stock to buy, but this isn’t the ideal time to buy it. The chart of LULU stock above even looks “peaky,” inviting profit-taking.

In terms of a bigger picture though, there’s something unique about Lululemon that has made it mostly immune from the traps rivals like Under Armour and Nike find themselves in. Being the best-of-breed is a big boon for a stock, even if the breed as a whole is out of favor.

Again though, timing is everything.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.