Shares of Ulta Beauty (ULTA) have been strong performers currently, with the stock up 6.6% over the previous thirty day period. The inventory hit a new 52-7 days superior of $364.26 in the earlier session. Ulta Attractiveness has received 26% given that the start of the 12 months when compared to the -3.1% shift for the Zacks Retail-Wholesale sector and the -13.5% return for the Zacks Retail – Miscellaneous field.

What is actually Driving the Outperformance?

The stock has a excellent record of optimistic earnings surprises, as it has not skipped our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 27, 2021, Ulta reported EPS of $4.1 vs . consensus estimate of $1.92.

For the latest fiscal 12 months, Ulta is envisioned to write-up earnings of $12.17 per share on $7.84 billion in revenues. This signifies a 161.16% adjust in EPS on a 27.38% transform in revenues. For the upcoming fiscal yr, the organization is envisioned to make $14 per share on $8.52 billion in revenues. This signifies a year-above-calendar year change of 15.02% and 8.74%, respectively.

Valuation Metrics

Ulta may perhaps be at a 52-week substantial ideal now, but what could the potential keep for the stock? A important component of this issue is taking a appear at valuation metrics in order to identify if the corporation is thanks for a pullback from this amount.

On this entrance, we can glance at the Zacks Model Scores, as these give buyers a variety of approaches to comb by stocks (beyond on the lookout at the Zacks Rank of a protection). These designs are represented by grades functioning from A to F in the categories of Benefit, Advancement, and Momentum, though there is a merged VGM Rating as nicely. Investors should really contemplate the design and style scores a worthwhile device that can assistance you to select the most appropriate Zacks Rank shares primarily based on their individual financial investment design and style.

Ulta has a Worth Rating of C. The stock’s Progress and Momentum Scores are A and F, respectively, providing the company a VGM Rating of B.

In terms of its benefit breakdown, the inventory at present trades at 29.7X current fiscal calendar year EPS estimates. On a trailing dollars stream basis, the inventory at this time trades at 36.3X as opposed to its peer group’s ordinary of 9X. Moreover, the stock has a PEG ratio of 1.8. This is just not adequate to place the enterprise in the prime echelon of all stocks we deal with from a price perspective.

Zacks Rank

We also want to consider the stock’s Zacks Rank, as this supersedes any trend on the design and style score entrance. Fortunately, Ulta at present has a Zacks Rank of #2 (Buy) thanks to growing earnings estimates.

Considering that we advise that buyers decide on stocks carrying Zacks Rank of 1 (Potent Acquire) or 2 (Get) and Design and style Scores of A or B, it seems as if Ulta passes the take a look at. Thus, it appears to be as although Ulta shares could have opportunity in the weeks and months to come.

How Does Ulta Stack Up to the Competitiveness?

Shares of Ulta have been soaring, and the firm even now seems to be a good selection, but what about the rest of the industry? Some of its business friends are also looking fantastic, which include DICKS Sporting Products (DKS), Tractor Offer (TSCO), and AutoZone (AZO), all of which presently have a Zacks Rank of at least #2 and a VGM Score of at minimum B, producing them properly-rounded choices.

The Zacks Business Rank is in the prime 42% of all the industries we have in our universe, so it appears like there are some wonderful tailwinds for Ulta, even outside of its have reliable basic predicament.

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