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Ulta Beauty (ULTA) Gains As Market Dips: What You Should Know

Zacks Equity Research

Ulta Beauty (ULTA) closed at $346.68 in the latest trading session, marking a +1.38% move from the prior day. This move outpaced the S&P 500's daily loss of 0.45%. Elsewhere, the Dow lost 0.25%, while the tech-heavy Nasdaq lost 0.5%.

Prior to today's trading, shares of the beauty products retailer had lost 2.34% over the past month. This has lagged the Retail-Wholesale sector's gain of 4.73% and the S&P 500's gain of 2.62% in that time.

Wall Street will be looking for positivity from ULTA as it approaches its next earnings report date. This is expected to be May 30, 2019. In that report, analysts expect ULTA to post earnings of $3.06 per share. This would mark year-over-year growth of 16.35%. Our most recent consensus estimate is calling for quarterly revenue of $1.74 billion, up 13.02% from the year-ago period.

ULTA's full-year Zacks Consensus Estimates are calling for earnings of $12.78 per share and revenue of $7.54 billion. These results would represent year-over-year changes of +17.79% and +12.21%, respectively.

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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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 0.04% higher. ULTA is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, ULTA is holding a Forward P/E ratio of 26.75. This valuation marks a premium compared to its industry's average Forward P/E of 11.35.

Also, we should mention that ULTA has a PEG ratio of 1.45. 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 1.88 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 100, which puts it in the top 40% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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