Does Ulta Beauty Stock Have More Room To Run?

ULTA: Ulta Salon Cosmetics & Fragrance logo
Ulta Salon Cosmetics & Fragrance

[Note: ULTA  fiscal year ends in January ]

Ulta Beauty’s stock (NASDAQ: ULTA), formerly known as Ulta Salon, Cosmetics & Fragrance Inc, is a one-stop shop for cosmetics, makeup brushes, styling tools, hair care products, skincare products, and expert advice on using them all. The company’s stock has increased by almost 16% over the last twenty-one trading days (one month) and currently stands at around $443. In comparison, the broader S&P500 index declined almost 3% over the same period. The company was able to defy some of the macro pressures impacting the retail sector to post another stellar earnings report recently. Ulta Beauty continued to drive growth across all of its operating segments – cosmetics, haircare, skincare, and fragrance, in Q2. Consequently, it saw rec0rd-breaking numbers in both the top and bottom lines. The company’s revenues grew 17% year-over-year (y-o-y) to $2.3 billion and its adjusted earnings per share came in at $5.69, up from $4.52 a year ago. In addition, Ulta Beauty reported comparable store sales growth of 14.4% in Q2 against a tough y-o-y comparison when they were up 56.3%. The company’s comparable sales growth proves Ulta’s strong business model and ability to generate sales from its existing stores. That said, Ulta opened seven net new stores in the second quarter, running its total count to 1,325.

Not only did Ulta Beauty beat expectations in Q2, but again increased full-year revenue, EPS, and CAPEX guidance for the latter half of 2022. Looking ahead, ULTA expects full-year 2022 revenue of $9.65 billion to $9.75 billion compared to a previous view of $9.35 billion to $9.55 billion. FY’22 EPS is expected to land between $20.70 to $21.20 compared to the prior guidance range of $19.20 to $20.10. In addition, the company’s operating margin is seen coming in at 14.6% to 14.8% vs. 14.1% to 14.4% prior view.

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Is ULTA stock poised to decline in the short term or are gains looking more likely? Based on our machine learning analysis of trends in the stock price over the last six years, there is a 51% chance of a rise in ULTA stock over the next month (twenty-one trading days). See our analysis of ULTA’s Stock Chance Of Rise for more details.

Calculation of ‘Event Probability’ and ‘Chance of rising’ using last six years’ data

[1] Returns of 4.4% or higher over a five-day period on 262 occasions out of 1415 (19%); Stock rose in the next five days in 138 of these 262 instances (53%)

[2] Returns of 5.6% or higher over a ten-day period on 271 occasions out of 1414 (19%); Stock rose in the next ten days in 129 of these 271 instances (48%)

[3] Returns of 16% or higher over a twenty-one-day period on 78 occasions out of 1412 (6%); Stock rose in the next twenty-one days in 40 of these 78 instances (51%)

It is helpful to see how its peers stack up. ULTA Peers shows how Ulta Beauty stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Sep 2022
MTD [1]
YTD [1]
Total [2]
 ULTA Return 6% 8% 99%
 S&P 500 Return 4% -14% 84%
 Trefis Multi-Strategy Portfolio 6% -10% 254%

[1] Month-to-date and year-to-date as of 9/13/2022
[2] Cumulative total returns since the end of 2016

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