Lululemon Athletica Inc. (NASDAQ: LULU) has not been without its share of problems. Still, many companies stumble and manage to get back up off the ground. This is what a turnaround story is supposed to be all about. 24/ Wall St. has covered Lululemon’s massive, multiyear growth and fall from grace rather closely. Now it seems investors are firmly betting on the worst being behind the yoga and exercise apparel leader.

We wanted to briefly address the earnings, but also to see what analysts were saying and where things could go from here.

When Lululemon reported its third-quarter financial results of $0.42 in earnings per share, this was above the consensus estimates calling for $0.38 per share. Still, the same period in the prior year had $0.45 in earnings per share. What was amazing about the reaction last Thursday was that shares rallied handily despite soft guidance. Lululemon guided the fourth quarter to a range of $0.65 to $0.69 in earnings per share and $570 million to $585 million in revenues. The consensus estimates call for $0.72 in earnings per share and $593.54 million in revenue.

When we covered Thursday’s three unexpected stock rallies on bad news, Lululemon’s stock was up almost 9% at $50.78 in the noon hour. Lululemon shares were almost another 4% higher on Friday, as the stock closed at $52.95. The 52-week trading range is $36.26 to $64.38.

The consensus analyst price target was $45.79 on Thursday, but the upgrades and higher analyst price targets later in the week have taken the consensus target up to $52.21. The highest analyst price target is $66.

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What investors need to understand is that a revaluation has taken place. This stock’s former days of massive price-to-earnings (P/E) ratios may be behind it. Still, the stock trades at 26 times next year’s earnings estimates, and at about 29 times this year’s expected earnings. So, what are the analysts and market pundits saying about Lululemon now that earnings have been released?

Jim Cramer of TheStreet and CNBC said late last week, after the earnings report, that Lululemon is a fabulous brand that has reached an inflection point. He further said that the bottom seems to be in for the stock, as well as that it seems ready to move much higher.

Analysts on Wall Street have chimed in and raised ratings or price targets.

• Canaccord Genuity maintained its Hold rating but raised its price target to $48 from $42.
• Deutsche Bank reiterated its Hold rating and raised its target to $46 from $40.
• Morgan Stanley has an Equal Weight rating and raised its price target to $42 from $39.
• Oppenheimer has an Outperform rating and a $58 price target.
• Telsey Advisory Group raised its official rating to Outperform from Market Perform.
• Topeka Capital Markets has a Buy rating and raised its target price to $60 from $55.

Lululemon’s short interest remains more than just elevated as well. Some 23,433,941 shares were still short at the end of November. That represents nine days to cover, and the peak in short interest was above 27 million shares earlier in 2014.

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Lululemon shares were trading at $46.70 prior to its earnings report. That means the shares rallied more than 13% over the two trading days after the report. This also happened when Friday’s stock market went into panic mode — the S&P 500 was down 33 points and the Dow Jones Industrial Average was down more than 300 points.

Lululemon shares traded above $80 in three different months in 2012 and 2013. The stock is now down in the low $50s, after having dropped into the mid-$30s during its trauma. Does this stock have to go back into the $80s to be a success? Not by our take.

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