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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 at $251.52 in the latest trading session, marking a -1.42% move from the prior day. This change lagged the S&P 500's daily loss of 0.02%. Meanwhile, the Dow gained 0.29%, and the Nasdaq, a tech-heavy index, lost 0.39%.

Coming into today, shares of the beauty products retailer had lost 18.52% in the past month. In that same time, the Retail-Wholesale sector lost 2.11%, while the S&P 500 lost 2.56%.

Investors will be hoping for strength from ULTA as it approaches its next earnings release, which is expected to be March 21, 2019. The company is expected to report EPS of $3.56, up 29.45% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $2.13 billion, up 9.75% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.89 per share and revenue of $6.77 billion, which would represent changes of +33.46% and +15.03%, respectively, from the prior year.

Any recent changes to analyst estimates for ULTA should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.12% lower. ULTA is currently a Zacks Rank #3 (Hold).

Looking at its valuation, ULTA is holding a Forward P/E ratio of 23.42. This represents a premium compared to its industry's average Forward P/E of 10.37.

We can also see that ULTA currently has a PEG ratio of 1.27. 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. ULTA's industry had an average PEG ratio of 1.47 as of yesterday's close.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 93, which puts it in the top 36% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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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