Back to top

Image: Bigstock

Ulta Beauty (ULTA) Stock Slides as Market Rises: Facts to Know Before You Trade

Read MoreHide Full Article

Ulta Beauty (ULTA - Free Report) closed the latest trading day at $369.32, indicating a -0.34% change from the previous session's end. This change lagged the S&P 500's 0.77% gain on the day. Elsewhere, the Dow gained 0.47%, while the tech-heavy Nasdaq added 0.87%.

The the stock of beauty products retailer has fallen by 2.05% in the past month, lagging the Retail-Wholesale sector's gain of 5.56% and the S&P 500's gain of 4.87%.

The investment community will be paying close attention to the earnings performance of Ulta Beauty in its upcoming release. It is anticipated that the company will report an EPS of $4.49, marking a 11.44% fall compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $2.5 billion, up 0.43% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $23.11 per share and revenue of $11.19 billion, which would represent changes of -11.22% and -0.13%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Ulta Beauty. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 has moved 0.43% lower. Currently, Ulta Beauty is carrying a Zacks Rank of #5 (Strong Sell).

With respect to valuation, Ulta Beauty is currently being traded at a Forward P/E ratio of 16.03. This signifies a premium in comparison to the average Forward P/E of 12.77 for its industry.

It's also important to note that ULTA currently trades at a PEG ratio of 2.12. 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. By the end of yesterday's trading, the Retail - Miscellaneous industry had an average PEG ratio of 2.12.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 166, finds itself in the bottom 35% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Ulta Beauty Inc. (ULTA) - free report >>

Published in