Ulta Beauty, Inc. Common Stock
ULTA
$537.39
+0.15%
Ulta Beauty is the largest specialized beauty retailer in the United States, operating over 1,500 freestanding stores. It is a dominant omnichannel player with a core advantage in combining a vast product assortment with in-store salon services to drive customer loyalty and traffic.…
ULTA
Ulta Beauty, Inc. Common Stock
$537.39
Related headlines
Investment Opinion: Should I buy ULTA Today?
Based on a synthesis of the data, the objective assessment leans towards Hold. The company's strong fundamentals and market position are undeniable, and the forward P/E of 16.6 is more reasonable. However, the severe technical breakdown, clear margin pressures, and high absolute valuation multiples warrant caution. Investors should wait for evidence of margin stabilization and a clearer technical bottom before considering new positions. The recent institutional analyst actions, while mostly positive, have not prevented the sharp sell-off, indicating the market is focused on near-term risks.
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ULTA 12-Month Price Forecast
The analysis yields a neutral stance with medium confidence. The fundamental story is intact but facing clear headwinds. The path of net margins over the next few quarters will be the primary determinant of stock price direction. The current price offers a more reasonable entry point than recent highs, but the risk of further downside remains until the margin trend reverses.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Ulta Beauty, Inc. Common Stock's 12-month outlook, with a consensus price target around $698.61 and implied upside of +30.0% versus the current price.
Average Target
$698.61
5 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
5
covering this stock
Price Range
$430 - $699
Analyst target range
Analyst consensus data on target price and ratings distribution is not available in the provided inputs. The institutional ratings show recent actions from ten firms, with a majority maintaining positive ratings such as Overweight, Outperform, and Buy, though one firm maintains an Underweight rating. No sufficient analyst coverage data on consensus targets is available to summarize.
Bulls vs Bears: ULTA Investment Factors
Ulta Beauty presents a classic growth-at-a-reasonable-price dilemma. The company's fundamental strengths—market dominance, revenue growth, and high returns—are compelling. However, these are currently overshadowed by significant technical damage, margin pressure, and a valuation that remains high despite the recent correction. The stock's near-term trajectory will likely depend on its ability to stabilize margins.
Bullish
- Dominant Market Position: Largest U.S. beauty retailer with 1,500+ stores and strong omnichannel presence.
- Strong Revenue Growth: Latest quarterly revenue grew 11.8% year-over-year to $3.9 billion.
- Robust Free Cash Flow: Generates substantial TTM free cash flow of $985.6 million.
- High Return on Equity: ROE of 41.1% indicates highly efficient use of shareholder capital.
Bearish
- Severe Technical Weakness: Stock down 23.7% in one month and 27% from recent peak.
- Profit Margin Compression: Net income margin fell to 9.15% from 11.28% year-ago.
- High Valuation Multiples: Trailing P/E of 25.2 and PEG ratio of 22.9 are elevated.
- Economic Sensitivity: Consumer cyclical stock vulnerable to stagflation concerns.
ULTA Technical Analysis
The stock's overall trend over the past six months has been volatile but ultimately negative, declining 6.3% from October 2025 to the current price of $522.71. It experienced a significant rally from late November 2025 into February 2026, reaching a high near $707, before a sharp correction in March erased most of those gains. Short-term performance has been severely negative, with the stock down 23.67% over the past month and 13.60% over the past three months, significantly underperforming the broader market as indicated by the negative relative strength figures. The current price of $522.71 sits near the lower end of its 52-week range of $323.37 to $714.97, representing a decline of approximately 27% from its recent peak and indicating the stock is in a technically weak position following the recent sell-off.
Beta
0.85
0.85x market volatility
Max Drawdown
-27.8%
Largest decline past year
52-Week Range
$323-$715
Price range past year
Annual Return
+40.5%
Cumulative gain past year
| Period | ULTA Return | S&P 500 |
|---|---|---|
| 1m | -19.7% | -3.6% |
| 3m | -13.3% | -4.0% |
| 6m | -3.4% | -2.0% |
| 1y | +40.5% | +16.2% |
| ytd | -13.3% | -3.8% |
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ULTA Fundamental Analysis
Revenue growth remains positive, with the latest quarterly revenue of $3.90 billion showing an 11.78% year-over-year increase. However, profitability metrics show some pressure; the net income margin for Q4 2026 was 9.15%, down from 11.28% in the year-ago quarter, indicating margin compression likely from rising costs. The company maintains a solid financial position with a debt-to-equity ratio of 0.78 and a current ratio of 1.41, suggesting manageable leverage and adequate short-term liquidity, supported by strong trailing twelve-month free cash flow of $985.6 million. Operational efficiency remains a strength, as evidenced by a high return on equity of 41.14% and a return on assets of 14.74%, indicating effective use of shareholder capital and company assets to generate profits.
Quarterly Revenue
$3.9B
2026-01
Revenue YoY Growth
+0.11%
YoY Comparison
Gross Margin
+0.38%
Latest Quarter
Free Cash Flow
$985555000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ULTA Overvalued?
Given the company's positive net income, the primary valuation metric is the P/E ratio. Ulta's trailing P/E ratio is 25.17, while its forward P/E is lower at 16.58, based on analyst estimates. This forward multiple suggests the market is pricing in expected earnings growth. Peer comparison data for industry averages is not available in the provided inputs, so a relative valuation assessment cannot be made.
PE
25.2x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 12x~25x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
16.6x
Enterprise Value Multiple
Investment Risk Disclosure
Ulta faces several material risks. Financially, the compression in net income margin from 11.28% to 9.15% year-over-year is a key concern, indicating rising costs (SG&A, COGS) are pressuring profitability despite top-line growth. Operationally, as a consumer discretionary retailer, it is highly exposed to macroeconomic headwinds; recent news highlights reviving stagflation fears which could dampen consumer spending on beauty products. The stock's high sensitivity is evidenced by its severe underperformance relative to the S&P 500 over the past month (-23.7% vs -5.25%). Furthermore, valuation risk persists with a trailing P/E of 25.2 and a very high PEG ratio of 22.9, suggesting growth expectations are already richly priced, leaving little room for disappointment. The ending of its Target partnership in summer 2026 also presents a future revenue stream uncertainty.
FAQ
The key risks are: 1) Profit Margin Compression: Net income margin fell to 9.15% from 11.28% a year ago. 2) Macroeconomic Sensitivity: As a consumer cyclical stock, it is vulnerable to recession or stagflation fears. 3) High Valuation: Elevated P/E and PEG ratios leave little room for error. 4) Technical Weakness: The stock is down 23.7% in one month, indicating strong selling pressure.
The 12-month outlook is for a period of consolidation with a base case target range of $520 to $600 (55% probability). A bull case to $715 (25% probability) requires margin recovery, while a bear case to $400 (20% probability) involves a worsening consumer environment. The primary factor will be the trajectory of the company's net profit margins in upcoming quarters.
ULTA's valuation is mixed. Its trailing P/E of 25.2 and very high PEG ratio of 22.9 suggest it is richly valued relative to its growth profile. However, its forward P/E of 16.6, based on analyst estimates, indicates the market is pricing in expected earnings growth and offers a more reasonable multiple. Overall, it is fairly valued to slightly overvalued given the current margin pressures.
ULTA is a Hold, not a clear Buy at this moment. The company's fundamentals are strong with 11.8% revenue growth and a 41% ROE, but the stock has fallen 27% from its peak due to margin pressure. The forward P/E of 16.6 is reasonable, but investors should wait for signs of margin stabilization before buying, as the technical picture remains weak.
ULTA is more suitable for long-term investors who can tolerate volatility. The company's dominant market position and high returns on capital support a long-term growth thesis. However, the significant near-term headwinds from margin pressure and technical weakness make it a challenging and risky short-term trade. Patient investors may find better entry points.