Ulta Beauty (ULTA) closed at $405.65 in the latest trading session, marking a +0.86% move from the prior day. This change outpaced the S&P 500’s 0.34% gain on the day. Elsewhere, the Dow lost 0.17%, while the tech-heavy Nasdaq lost 0.12%.
Heading into today, shares of the beauty products retailer had gained 12.3% over the past month, outpacing the Retail-Wholesale sector’s gain of 3.92% and the S&P 500’s gain of 4.99% in that time.
Ulta Beauty will be looking to display strength as it nears its next earnings release, which is expected to be December 2, 2021. The company is expected to report EPS of $2.46, up 50% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.89 billion, up 21.53% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $15.06 per share and revenue of $8.35 billion. These totals would mark changes of +223.18% and +35.77%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Ulta Beauty. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 0.85% lower. Ulta Beauty is currently a Zacks Rank #3 (Hold).
Investors should also note Ulta Beauty’s current valuation metrics, including its Forward P/E ratio of 26.71. For comparison, its industry has an average Forward P/E of 18.33, which means Ulta Beauty is trading at a premium to the group.
It is also worth noting that ULTA currently has a PEG ratio of 2.05. 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. The Retail – Miscellaneous was holding an average PEG ratio of 1.09 at yesterday’s closing price.
The Retail – Miscellaneous industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 38% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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