Ulta Beauty Inc's Meteoric Rise: Unpacking the 14% Surge in Just 3 Months

Ulta Beauty Inc (ULTA, Financial) has experienced a remarkable surge in its stock price, with a 13.87% gain over the past week and a 13.51% gain over the past three months. The company's market capitalization now stands at $22.93 billion, with the current stock price at $472.23. According to GF Value, the intrinsic value of ULTA is estimated at $568.76, up from the past GF Value of $550.55. This indicates that Ulta Beauty is currently modestly undervalued, maintaining the same valuation status as three months ago.

Introduction to Ulta Beauty Inc

Ulta Beauty Inc, a titan in the retail - cyclical industry, operates as the largest specialized beauty retailer in the United States. With a vast array of products and services, including makeup, fragrances, skin care, and hair care, Ulta Beauty has established a significant presence with 1,355 stores and a strategic partnership with Target. The company's commitment to offering a blend of private-label products and merchandise from over 500 vendors, along with comprehensive salon services, has positioned it as a one-stop beauty destination. Founded in 1990 and headquartered in Bolingbrook, Illinois, Ulta Beauty continues to thrive in the beauty retail space.

1731678516140896256.png

Assessing Ulta Beauty's Profitability

Ulta Beauty's financial health is robust, as evidenced by its impressive Profitability Rank of 9/10. The company's operating margin stands at 14.85%, outperforming 88.22% of 1,112 companies in the industry. Its return on equity (ROE) is a staggering 61.99%, surpassing 96.05% of its peers. The return on assets (ROA) at 22.98% and return on invested capital (ROIC) at 30.99% further demonstrate Ulta Beauty's exceptional ability to generate profits relative to its equity, assets, and invested capital. These figures not only highlight the company's efficiency but also its competitive edge, with a consistent track record of profitability over the past decade.

Ulta Beauty's Growth Trajectory

Ulta Beauty's growth metrics are equally impressive, with a Growth Rank of 10/10. The company has achieved a 3-year revenue growth rate per share of 15.70% and a 5-year rate of 13.80%, indicating sustained revenue expansion. Future estimates suggest a total revenue growth rate of 6.45% over the next 3 to 5 years. Earnings per share (EPS) growth rates are also robust, with a 3-year EPS without NRI growth rate of 24.90% and a 5-year rate of 16.40%. The estimated EPS growth rate for the next 3 to 5 years is 9.62%, reflecting a positive outlook for the company's earnings potential.

Notable Shareholders in Ulta Beauty

Ulta Beauty's shareholder base includes prominent investors such as Jim Simons (Trades, Portfolio), who holds 398,399 shares, representing a 0.81% stake in the company. The Harbor Capital Appreciation Fund (Trades, Portfolio) holds 278,558 shares, accounting for 0.57% of Ulta's shares, while Steven Cohen (Trades, Portfolio) owns 170,657 shares, translating to a 0.35% share percentage. These holdings by influential investors underscore the confidence in Ulta Beauty's market performance and future prospects.

Competitive Landscape

When compared to its competitors, Ulta Beauty stands strong with a market cap of $22.93 billion. Tractor Supply Co (TSCO, Financial) closely follows with a market cap of $22.71 billion, while Genuine Parts Co (GPC, Financial) and Best Buy Co Inc (BBY, Financial) have market caps of $18.88 billion and $15.98 billion, respectively. This comparison highlights Ulta Beauty's significant market presence and its ability to maintain a leading position within the retail - cyclical industry.

Conclusion

In conclusion, Ulta Beauty Inc's stock performance, profitability, and growth prospects paint a picture of a company that is not only thriving in its industry but also presents a compelling investment opportunity. The company's modest undervaluation, according to GF Value, combined with its strong profitability and growth rankings, positions it favorably against its competitors. With a solid foundation and positive future estimates, Ulta Beauty is poised to continue its upward trajectory, making it an attractive option for value investors seeking growth and stability.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure