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Why Ulta Beauty (ULTA) Dipped More Than Broader Market Today

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Ulta Beauty (ULTA - Free Report) closed the latest trading day at $412.15, indicating a -1.52% change from the previous session's end. This change lagged the S&P 500's daily loss of 0.51%. On the other hand, the Dow registered a loss of 0.75%, and the technology-centric Nasdaq decreased by 0.28%.

Prior to today's trading, shares of the beauty products retailer had lost 2.48% over the past month. This has lagged the Retail-Wholesale sector's gain of 7.41% and the S&P 500's gain of 2.87% in that time.

The upcoming earnings release of Ulta Beauty will be of great interest to investors. It is anticipated that the company will report an EPS of $7.12, marking a 11.88% fall compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $3.46 billion, indicating a 2.6% decrease compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $23.99 per share and revenue of $11.27 billion, which would represent changes of -7.84% and +0.56%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Ulta Beauty. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been a 1.68% rise in the Zacks Consensus EPS estimate. At present, Ulta Beauty boasts a Zacks Rank of #2 (Buy).

In terms of valuation, Ulta Beauty is currently trading at a Forward P/E ratio of 17.44. This indicates a premium in contrast to its industry's Forward P/E of 15.21.

It is also worth noting that ULTA currently has a PEG ratio of 1. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Retail - Miscellaneous industry had an average PEG ratio of 1.42.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 15, placing it within the top 6% of over 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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