Ulta Beauty Trailing Behind Sector Amid Mixed Market Movement
In the latest trading session, Ulta Beauty (ULTA) closed at $473.78, showcasing a -1.23% change from the previous day. This development lagged the S&P 500's 0.4% loss on the same day. Meanwhile, the Dow lost 0.98%, and the Nasdaq, a tech-heavy index, added 0.18%. The beauty products retailer's stock has climbed by 1.64% in the past month, falling short of the Retail-Wholesale sector's gain of 4.14% and the S&P 500's gain of 4.97%.
Earnings Outlook for Ulta Beauty
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 $4.87, marking a 8.11% fall compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $2.6 billion, reflecting a 1.7% rise from the equivalent quarter last year.
Zacks Consensus Estimates for the Entire Fiscal Year
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $23.39 per share and a revenue of $11.64 billion, indicating changes of -7.7% and +3.04%, respectively, from the former year.
Impact of Analyst Estimate Revisions on Stock Performance
Investors should also take note of any recent adjustments to analyst estimates for Ulta Beauty. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank System
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing externally audited results, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been a 0.65% fall in the Zacks Consensus EPS estimate. Ulta Beauty is currently sporting a Zacks Rank of #3 (Hold).
Valuation Metrics for Ulta Beauty
Investors should also note that Ulta Beauty is currently trading at a Forward P/E ratio of 20.51. This signifies a premium in comparison to the average Forward P/E of 13.56 for its industry.
Furthermore, the company possesses a PEG ratio of 2.91 right now. The PEG ratio is similar to the widely-used P/E ratio but also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Retail - Miscellaneous industry had an average PEG ratio of 2.91.
Zacks Industry Rank for the Retail - Miscellaneous Industry
The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 178, finds itself in the bottom 28% echelons of all 250+ industries.
Conclusion
Our analysis demonstrates that Ulta Beauty's performance, while outpacing some sectors, still poses challenges for investors due to mixed market movements and changes in analyst estimates. By understanding these factors through our Zacks Rank system and various valuation metrics, investors can make more informed decisions about their portfolios.
We recommend using Zacks.com for up-to-date information on stock-moving metrics during your trading sessions.