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

Zacks Equity Research

In the latest trading session, Ulta Beauty (ULTA) closed at $240.25, marking a -0.77% move from the previous day. This move lagged the S&P 500's daily gain of 0.33%. At the same time, the Dow added 0.43%, and the tech-heavy Nasdaq gained 0.33%.

Heading into today, shares of the beauty products retailer had lost 8.98% over the past month, lagging the Retail-Wholesale sector's gain of 2.33% and the S&P 500's gain of 2.66% 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 December 5, 2019. In that report, analysts expect ULTA to post earnings of $2.15 per share. This would mark a year-over-year decline of 1.38%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.69 billion, up 8.46% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.96 per share and revenue of $7.40 billion. These totals would mark changes of +10.23% and +10.19%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for ULTA. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ULTA is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, ULTA is holding a Forward P/E ratio of 20.25. Its industry sports an average Forward P/E of 11.72, so we one might conclude that ULTA is trading at a premium comparatively.

We can also see that ULTA currently has a PEG ratio of 1.21. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Miscellaneous industry currently had an average PEG ratio of 1.61 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 102, which puts it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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


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