10Y annualized return is
average
at 9.8% per year
ULTA has met or exceeded earnings expectations in
some
recent quarters (1/2)
Attractive P/E Ratio
Low Price-to-Sales Ratio
Strong Return on Equity
Healthy Gross Profit Margin
Solid Current Ratio
🏆 Strong Market Position
📈 Effective Promotional Strategies
🌟 Strong Innovation Pipeline
📊 Growth Strategies in Place
High P/FCF Ratio
Elevated EV/EBITDA Ratio
Moderate Net Profit Margin
High Debt Levels
Low Quick Ratio
Interest Coverage Issues
⚠️ Competitive Pressures
🔍 Uncertain Consumer Environment
Overall, Ulta Beauty demonstrates strong market positioning and effective promotional strategies, but faces significant competitive pressures and an uncertain consumer environment. The company's innovation pipeline and growth strategies offer promising future prospects.
Analysis Date: December 5, 2024
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Ulta Beauty, Inc. is a popular store in the United States that sells a wide range of beauty products. They offer makeup, skincare, haircare items, and fragrances, as well as tools for styling hair. In addition to products, Ulta also provides salon services like haircuts, makeup applications, and brow shaping. You can shop at their physical stores or visit their website to buy products online.
Streams of revenue
Geographic Distribution
Estimations for reference only
Core Products
Business Type
Business to Consumer
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$324.49
Current Market Price: $351.90
IV/P Ratio: 0.92x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-8.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for ULTA
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (13.84)
P/B ratio ≤ 1.5 (6.68)
Current ratio ≥ 2.0 (1.70x)
Long-term debt < Net current assets (1.31x)
Margin of safety (-8.0%)
ULTA does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
A return on equity (ROE) of 51.95% indicates that ULTA effectively generates significant profit relative to shareholders' equity, showcasing high profitability.
With a gross profit margin of 38.67%, ULTA demonstrates solid pricing power and effective cost management, which is favorable for profitability.
A net profit margin of 10.58% suggests that while ULTA is profitable, there is room for improvement in converting revenue into actual profit.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
50.75%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-25)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
38.84%
Higher values indicate better efficiency in production
TTM (as of 2025-04-25)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
10.63%
Higher values indicate better overall profitability
TTM (as of 2025-04-25)
A current ratio of 1.63 indicates that ULTA has good short-term liquidity, meaning it can cover its short-term liabilities with its short-term assets.
The debt-to-equity ratio of 0.92 indicates that ULTA has a significant amount of debt relative to equity, which could pose risks in a downturn.
With a quick ratio of 0.32, ULTA may struggle to cover immediate obligations without selling inventory, which could be a concern for liquidity.
An interest coverage ratio of 0.0 indicates that ULTA may not currently generate enough earnings to cover its interest expenses, raising red flags about its financial sustainability.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.77x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.70x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Ulta Beauty maintained flat market share in the prestige category, indicating resilience amidst competition. The company reported improved market share trends in makeup and hair, with strength in fragrance and skin care. Their loyalty program grew to 44.4 million active members, enhancing customer retention and engagement.
The company's strategic promotional events, such as '21 Days of Beauty' and 'Fall Haul', successfully drove customer engagement and sales growth. Enhanced personalization efforts contributed to better promotional effectiveness and customer retention.
Ulta Beauty faces significant competition with over 1,000 new points of distribution in the prestige beauty market, impacting market share. The company acknowledged ongoing headwinds from competitors, particularly in the mass beauty segment.
Ulta plans to launch several new and exclusive brands, including TATCHA and a collaboration with Khloe Kardashian. This focus on innovation and new product offerings is expected to drive customer excitement and sales growth.
The company is enhancing digital experiences and expanding its e-commerce capabilities, including partnerships with platforms like DoorDash and Instacart. This positions Ulta to better serve customers and capture online market share.
The company is navigating a dynamic consumer environment with concerns about economic conditions impacting spending. Q4 expectations indicate potential low single-digit comp sales declines.
