Ulta BeautyFRA:34U -1.37%96 WACC % is 8.13% as of Jun. 27, 2026, which is 14% below its 10-year median of 9.40. GuruFocus rates FRA:34U with a GF Score™ of 96/100 and a GF Value™ of €487.50 (Modestly Undervalued). The stock has 2 warning signs investors should review. Among 1,143 Retail - Cyclical companies, Ulta Beauty ranks worse than 77.17% on this metric.
As of today (2026-06-27), Ulta Beauty's weighted average cost of capital is 8.13%%. Ulta Beauty's ROIC % is 23.38% (calculated using TTM income statement data).
Ulta Beauty generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
For a comprehensive WACC calculation, please access the WACC Calculator.
Ulta Beauty (FRA:34U) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Ulta Beauty's weighted average cost of capital is 8.13%%. Ulta Beauty's ROIC % is 23.38% (calculated using TTM income statement data).
Ulta Beauty generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
Ulta Beauty WACC % Historical Data
* Premium members only.
The historical data trend for Ulta Beauty's WACC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Specialty Retail subindustry, Ulta Beauty's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Ulta Beauty WACC % vs Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Ulta Beauty's WACC % distribution charts can be found below:
* The bar in red indicates where Ulta Beauty's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Ulta Beauty's market capitalization (E) is €18482.322 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Apr. 2026, Ulta Beauty's latest one-year quarterly average Book Value of Debt (D) is €1951.1502 Mil.
a) weight of equity = E / (E + D) = 18482.322 / (18482.322 + 1951.1502) = 0.9045
b) weight of debt = D / (E + D) = 1951.1502 / (18482.322 + 1951.1502) = 0.0955
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.376%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Ulta Beauty's beta is 0.7639.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.376% + 0.7639 * 6% = 8.9594%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Apr. 2026, Ulta Beauty's interest expense (positive number) was €5.775 Mil. Its total Book Value of Debt (D) is €1951.1502 Mil.
Cost of Debt = 5.775 / 1951.1502 = 0.296%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 325.827 / 1346.461 = 24.2%.
Ulta Beauty's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.9045
*
8.9594%
+
0.0955
*
0.296%
*
(1 - 24.2%)
=
8.13%
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Ulta Beauty (FRA:34U) has a WACC % of 8.13% as of Jun. 27, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Ulta Beauty and its competitors. This is 14% below median its historical median of 9.40. Over the past decade, Ulta Beauty's WACC % has ranged from 6.72 to 11.55. According to the industry distribution chart, Ulta Beauty ranks #882 out of 1143 companies in the Retail - Cyclical industry, placing it in the top 77.2%.
Is Ulta Beauty's WACC % too high?
Ulta Beauty's current WACC % of 8.13% is 14% below median its 10-year median of 9.40. Over the past 10 years, this metric has ranged from a low of 6.72 to a high of 11.55. The Retail - Cyclical industry median WACC % is 7.58. Ulta Beauty's value of 8.13% is 7.3% above this industry median. Based on the distribution chart, Ulta Beauty ranks #882 out of 1143 companies in the Retail - Cyclical industry, which is in the bottom quartile relative to peers. Overall, Ulta Beauty has a GF Score™ of 96/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Ulta Beauty's WACC % compare to WSM and DKS?
According to the Retail - Cyclical industry distribution chart, Ulta Beauty ranks #882 out of 1143 companies for WACC %. This places Ulta Beauty in the lower half of its industry. The industry median WACC % is 7.58. Ulta Beauty's value of 8.13% is 7.3% above this benchmark. Historically, Ulta Beauty's own WACC % has ranged from 6.72 to 11.55 over the past decade. While the company's 10-year median is 9.40 vs. the industry median of 7.58, Ulta Beauty has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Retail - Cyclical company?
The median WACC % among Retail - Cyclical companies is 7.58, based on 1,143 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Ulta Beauty's current WACC % of 8.13% is 7.3% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Ulta Beauty and its competitors. For the Retail - Cyclical industry, the median WACC % is 7.58 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Ulta Beauty's current WACC % is 8.13%, which is 14% below median its own 10-year median of 9.40. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Ulta Beauty stock overvalued right now?
Based on GuruFocus' analysis, Ulta Beauty (FRA:34U) is currently considered Modestly Undervalued. The stock's GF Value™ is €487.50, compared to a current price of €418.60 — trading 14.1% below its estimated fair value. The current WACC % is 8.13%, which is 14% below median its 10-year median of 9.40 and 7.3% above the Retail - Cyclical industry median of 7.58. Ulta Beauty's overall GF Score™ is 96/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Ulta Beauty (FRA:34U), the current WACC % is 8.13% as of Jun. 27, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Ulta Beauty (FRA:34U) Overvalued in 2026?
Based on GuruFocus' analysis, Ulta Beauty stock appears to be undervalued.
The current stock price of €418.60 is trading 14.1% below its estimated GF Value™ of €487.50.
GuruFocus considers Ulta Beauty to be Modestly Undervalued.
Key valuation signals for FRA:34U:
WACC %: 8.13% (14% below median its 10-year median of 9.40)
GF Value™: €487.50 vs. price of €418.60 (14.1% below fair value)
Industry Position: 7.3% above the Retail - Cyclical median (#882 of 1143)
No single metric tells the full story. See the FRA:34U stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Ulta Beauty is the largest specialized beauty retailer in the US with more than 1,500 freestanding stores. The firm offers cosmetics (38% of 2025 sales), fragrances (13%), skin care (24%), and hair care products (19%). It also has salon services, including hair, makeup, skin, and brow, that account for 4% of its revenue and drive customer traffic. Outside of the US, Ulta operates premium beauty retailer Space NK (86 stores at year-end 2025 in the UK and Ireland) and has franchised stores in Mexico, and a joint venture in the Middle East. Ulta was founded in 1990 and is based in Bolingbrook, Illinois.
96GF Score
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