Ulta Beauty (ULTA) Gains But Lags Market: What You Should Know
In the latest trading session, Ulta Beauty (ULTA) closed at $409.56, marking a +0.15% move from the previous day. The stock lagged the S&P 500's daily gain of 0.23%. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq gained 0.09%.
Prior to today's trading, shares of the beauty products retailer had gained 11.71% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.44% and the S&P 500's gain of 3.34% in that time.
Wall Street will be looking for positivity from Ulta Beauty as it approaches its next earnings report date. This is expected to be December 2, 2021. On that day, Ulta Beauty is projected to report earnings of $2.47 per share, which would represent year-over-year growth of 50.61%. Meanwhile, our latest consensus estimate is calling for revenue of $1.9 billion, up 22.1% from the prior-year quarter.
ULTA's full-year Zacks Consensus Estimates are calling for earnings of $15.09 per share and revenue of $8.37 billion. These results would represent year-over-year changes of +223.82% and +36.06%, respectively.
Investors should also note any recent changes to analyst estimates for Ulta Beauty. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. The Zacks Consensus EPS estimate has moved 0.16% higher within the past month. Ulta Beauty currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Ulta Beauty is currently trading at a Forward P/E ratio of 27.11. This represents a premium compared to its industry's average Forward P/E of 16.78.
Also, we should mention that ULTA has a PEG ratio of 2.09. 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. The Retail - Miscellaneous was holding an average PEG ratio of 0.86 at yesterday's closing price.
The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 105, putting it in the top 42% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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