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Ulta Beauty (ULTA) Dips More Than Broader Markets: What You Should Know

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Ulta Beauty (ULTA - Free Report) closed the most recent trading day at $509.09, moving -1.29% from the previous trading session. This change lagged the S&P 500's 0.46% loss on the day. At the same time, the Dow lost 0.17%, and the tech-heavy Nasdaq gained 6.06%.

Coming into today, shares of the beauty products retailer had lost 2.59% in the past month. In that same time, the Retail-Wholesale sector gained 0.44%, while the S&P 500 gained 0.85%.

Ulta Beauty will be looking to display strength as it nears its next earnings release, which is expected to be May 25, 2023. In that report, analysts expect Ulta Beauty to post earnings of $6.79 per share. This would mark year-over-year growth of 7.78%. Our most recent consensus estimate is calling for quarterly revenue of $2.61 billion, up 11.16% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $25.24 per share and revenue of $11.07 billion. These totals would mark changes of +5.12% and +8.43%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Ulta Beauty. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% higher. Ulta Beauty is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, Ulta Beauty is holding a Forward P/E ratio of 20.43. For comparison, its industry has an average Forward P/E of 11.02, which means Ulta Beauty is trading at a premium to the group.

Investors should also note that ULTA has a PEG ratio of 1.67 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Retail - Miscellaneous stocks are, on average, holding a PEG ratio of 1.8 based on yesterday's closing prices.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 185, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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