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

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The most recent trading session ended with Ulta Beauty (ULTA - Free Report) standing at $418.44, reflecting a -0.88% shift from the previouse trading day's closing. This move lagged the S&P 500's daily gain of 0.61%. Meanwhile, the Dow gained 0.3%, and the Nasdaq, a tech-heavy index, added 1.28%.

Prior to today's trading, shares of the beauty products retailer had lost 3.02% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.32% and the S&P 500's gain of 2.08% in that time.

The investment community will be paying close attention to the earnings performance of Ulta Beauty in its upcoming release. In that report, analysts expect Ulta Beauty to post earnings of $7.06 per share. This would mark a year-over-year decline of 12.62%. Simultaneously, our latest consensus estimate expects the revenue to be $3.46 billion, showing a 2.63% drop compared to the year-ago quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $23.94 per share and a revenue of $11.27 billion, signifying shifts of -8.03% and +0.52%, respectively, from the last year.

It is also important to note the recent changes to analyst estimates for Ulta Beauty. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.44% increase. Right now, Ulta Beauty possesses a Zacks Rank of #2 (Buy).

In terms of valuation, Ulta Beauty is currently trading at a Forward P/E ratio of 17.64. This represents a premium compared to its industry's average Forward P/E of 12.72.

Meanwhile, ULTA's PEG ratio is currently 1.01. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Retail - Miscellaneous industry stood at 1.39 at the close of the market yesterday.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 26, finds itself in the top 11% echelons of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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