Based on the latest analyst predictions, Ulta Beauty Inc (NASDAQ:ULTA) is estimated to considerably grow its earnings by 69.40% in the upcoming three years. At a current EPS of $7.565, this growth rate means shareholders can expect an impending EPS of $12.816. Today I will look at the latest data in order to investigate whether this expected growth rate is plausible. See our latest analysis for ULTA
Exciting times ahead?
Analysts are predicting good growth prospects for Ulta Beauty over the next couple of years. Expectation based on 25 analysts is strong, with earnings estimated to increase from current levels of $7.565 to $12.816 over the next couple of years. This illustrates a relatively optimistic outlook in the near term, with a relatively solid earnings per share growth rate of 69.40% over the next few years. In the same period revenue is predicted to jump from $5,317M to $8,193M and net income is predicted to rise from $470M to $797M in the next couple of years, growing by 69.40%. Margins are expected to be rather acceptable at 9.28%.
Basis for the growth
The past can be an insightful indicator for future performance for a stock. We can determine whether this level of expected growth is excessive or whether the company continues to go from strength to strength. ULTA’s triple-digit earnings growth the past couple of years indicates that the company’s past performance is supportive of a strong continuation. This means ULTA has already proven its capacity to grow at a robust rate, which should give investors higher conviction of analysts’ consensus prediction for the company’s future growth going forward.
For ULTA, I’ve compiled three key factors you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is ULTA worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ULTA is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ULTA? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.