Ulta Beauty (ULTA) closed at $519.33 in the latest trading session, marking a -1.25% move from the prior day. The stock's performance was behind the S&P 500's daily loss of 0.53%. At the same time, the Dow lost 0.71%, and the tech-heavy Nasdaq lost 0.93%.
The beauty products retailer's stock has climbed by 0.25% in the past month, exceeding the Retail-Wholesale sector's loss of 2.98% and lagging the S&P 500's gain of 1.13%.
The investment community will be closely monitoring the performance of Ulta Beauty in its forthcoming earnings report. The company is expected to report EPS of $4.45, down 13.42% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.71 billion, up 7.12% from the prior-year quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $24.33 per share and a revenue of $12.06 billion, signifying shifts of -3.99% and +6.76%, respectively, from the last year.
Investors should also take note of any recent adjustments to analyst estimates for Ulta Beauty. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. As of now, Ulta Beauty holds a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that Ulta Beauty has a Forward P/E ratio of 21.61 right now. Its industry sports an average Forward P/E of 15.84, so one might conclude that Ulta Beauty is trading at a premium comparatively.
Also, we should mention that ULTA has a PEG ratio of 2.9. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Retail - Miscellaneous industry held an average PEG ratio of 2.52.
The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 49, this industry ranks in the top 20% of all industries, numbering over 250.
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.
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Ulta Beauty Inc. (ULTA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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