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Ulta Beauty (ULTA) Registers a Bigger Fall Than the Market: Important Facts to Note

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Ulta Beauty (ULTA - Free Report) closed the latest trading day at $401.04, indicating a -0.59% change from the previous session's end. The stock fell short of the S&P 500, which registered a loss of 0.21% for the day. On the other hand, the Dow registered a loss of 0.1%, and the technology-centric Nasdaq decreased by 0.26%.

Coming into today, shares of the beauty products retailer had lost 4.98% in the past month. In that same time, the Retail-Wholesale sector gained 3.78%, while the S&P 500 gained 5.04%.

The investment community will be paying close attention to the earnings performance of Ulta Beauty in its upcoming release. The company is slated to reveal its earnings on May 30, 2024. The company's earnings per share (EPS) are projected to be $6.24, reflecting a 9.3% decrease from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $2.72 billion, showing a 3.41% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $26.42 per share and revenue of $11.72 billion, which would represent changes of +1.5% and +4.57%, respectively, from the prior year.

Any recent changes to analyst estimates for Ulta Beauty should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.55% lower within the past month. Ulta Beauty is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Ulta Beauty is currently trading at a Forward P/E ratio of 15.27. This represents a premium compared to its industry's average Forward P/E of 13.59.

One should further note that ULTA currently holds a PEG ratio of 1.66. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ULTA's industry had an average PEG ratio of 1.66 as of yesterday's close.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 96, positioning it in the top 39% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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