Lululemon Athletica (NASDAQ:LULU) is a great company. That doesn’t mean there can’t be a Lululemon stock bubble.

The company now has a market cap of $20.6 billion, after reporting what the market considered blowout earnings a month ago, net income of $96 million on revenue of $723 million.

Same store sales were up 19%, and online sales 74%. The company said on its earnings call it could hit $4 billion in revenue soon, and it has recruited a new CEO from Sephora, Calvin McDonald.

Life’s great at Lululemon, and that may be the problem. Retailers usually sell at a discount to revenue. If Lululemon hits its $4 billion target, it will still be selling at more than times its revenue. The price to earnings multiple is an eye-popping 60.4, the shares up over 90% so far in 2018.

Tight Operations and Lululemon Stock

There is indeed a lot to love about Lululemon.

This starts with the fact that its designs are custom-made in Asia and sold directly, either through its Web site or stores. This maximizes profit margins, and gross profits are consistently about 50% of revenue.

Then there is the niche. It starts with yoga, a very healthy exercise I personally enjoy. Lululemon has expanded that niche into an upper-middle class lifestyle brand, with loyal female athleisure customers who wear the stuff all day and breeze in to buy multiple copies of its pants, leggings, and shirts.

Lululemon’s recent success has analysts actively seeking reasons why this can continue, pointing to the athleisure trend, to Lululemon’s line of menswear, and to its online sales as reasons for continued momentum.

Well, there’s a thing we talk about in yoga a lot – ahimsa. At my YMCA, it means you stretch toward sensation but not toward pain. You don’t overdo it even if (like me) you still can’t do a downward dog after 10 years of trying.

Lululemon analysts aren’t practicing ahimsa.

Trends and Lululemon Stock

Five years ago Under Armour (NYSE:UAA) was just as hot as Lululemon is now. I suggested two years ago, when Under Armour was still riding high, that it should buy Lululemon.

They probably wish they had. Today the roles are reversed. Lululemon stock is worth a lot more as than Under Armour, which has yet to make up for the loss of Sports Authority as a sales channel. This doesn’t mean Lululemon should now buy Under Armour. But it does mean that Lululemon, as the hot look in athleisure, now has a target on its back.

The Gap (NYSE:GPS) is going after it hard with a new men’s athleisure line called Hill City, and while its market cap is half that of Lululemon, its August quarter sales of $4 billion are Lululemon’s full-year target.

Lululemon knows it needs to expand and is making a move into cycling apparel. Its menswear line is growing at 30% per year

The Bottom Line on Lululemon Stock

Analysts are getting nosebleeds over Lululemon’s current valuation. The median price target on Lululemon, where they expect it to be a year from now, is $160 per share. That’s just $5 from where it is now. Over half still have it on their buy lists, however.

Lululemon is a great company, it makes good clothes, but it’s more than fully priced. This is not a tech stock. Lululemon sells clothes against giants like Nike (NYSE:NKE), which could sink the stock in a minute if they really targeted its niche.

When the economy wobbles, Lululemon stock is one of the first that will crash.

Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article.