Ulta Beauty
ULTA
$521.46
+1.23%
Ulta Beauty is the largest specialized beauty retailer in the United States, operating over 1,500 freestanding stores that offer cosmetics, fragrances, skin care, hair care products, and salon services. The company also operates the premium beauty retailer Space NK in the UK and Ireland, along with franchised stores in Mexico and a joint venture in the Middle East, positioning it as a dominant omnichannel player in the beauty industry. Currently, the stock is in focus following a strong Q1 earnings beat and an upward revision to its full-year profit outlook, which has bolstered investor sentiment despite ongoing concerns about margin pressure and rising costs. The narrative centers on Ulta's ability to sustain growth in a competitive retail environment while managing inflationary headwinds and evolving consumer preferences.…
ULTA
Ulta Beauty
$521.46
Related headlines
Investment Opinion: Should I buy ULTA Today?
Based on the analysis, ULTA is rated a Buy. The thesis is that the company's accelerating revenue growth, improving operating margins, and attractive forward valuation (16.4x PE) provide a favorable risk/reward, with analyst consensus supporting a 19.5% upside to the average target of $623.42. The strong Q1 earnings beat and raised full-year guidance indicate that the company is executing well despite macro headwinds.
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ULTA 12-Month Price Forecast
The AI assessment leans bullish due to the strong fundamental momentum and attractive valuation. The accelerating revenue growth and margin expansion suggest that the company is executing well, and the forward PE is below historical norms. However, the high PEG ratio and macro uncertainties temper confidence. If the company can sustain growth above 10% and maintain margins, the stock is likely to re-rate higher. A downgrade to neutral would occur if revenue growth falls below 6% or gross margins drop below 39%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Ulta Beauty's 12-month outlook, with a consensus price target around $623.42 and implied upside of +19.6% versus the current price.
Average Target
$623.42
0 analysts
Implied Upside
+19.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$450 - $735
Analyst target range
Ulta Beauty is covered by 24 analysts, with a consensus recommendation of 'Buy' and a mean recommendation score of 1.81 (where 1 is Strong Buy and 5 is Sell). The average price target is $623.42, implying an upside of approximately 19.5% from the current price of $521.46. The distribution includes 10 recent ratings, with 7 Buy/Overweight/Outperform and 2 Neutral, and 1 Underweight, indicating a generally bullish sentiment but with some caution. The high target of $735.00 suggests that some analysts see significant upside potential, likely assuming continued growth acceleration and margin expansion, while the low target of $450.00 implies downside risks from competitive pressures or a consumer spending slowdown. The wide spread between the high and low targets (63% difference) indicates high uncertainty about the company's future performance, which is typical for a stock facing both growth opportunities and margin challenges.
Bulls vs Bears: ULTA Investment Factors
Ulta Beauty presents a mixed picture: strong revenue acceleration and margin expansion in Q1 FY2026 are offset by a stock that has been in a downtrend, trading near its 52-week low. The bull case is supported by accelerating growth, an improved operating margin, and a consensus Buy rating with 19.5% upside. The bear case is anchored on a high PEG ratio, gross margin pressure, and significant underperformance relative to the market. Currently, the evidence slightly favors the bulls due to the fundamental improvements and attractive forward valuation, but the key tension is whether the company can sustain its growth acceleration and margin recovery in a competitive retail environment. If growth decelerates or margins compress further, the stock could test its 52-week low; if it delivers on raised guidance, the upside to analyst targets is substantial.
Bullish
- Revenue growth accelerating to 11.1%: Q1 FY2026 revenue of $3.16B grew 11.1% YoY, up from 4.2% in Q4 FY2025 and 0.8% in Q2 FY2025, showing a clear acceleration trend. This is driven by strong retail store sales of $1.74B and e-commerce of $294M, indicating robust consumer demand.
- Operating margin expanded to 14.2%: Operating margin improved to 14.2% in Q1 FY2026 from 12.3% in Q4 FY2025, reflecting operational leverage and cost control. This is despite gross margin dipping slightly to 40.1%, showing that SG&A efficiency is driving profitability.
- Analyst consensus Buy with 19.5% upside: 24 analysts rate ULTA a Buy with an average target of $623.42, implying 19.5% upside from the current $521.46. The high target of $735 suggests some see 41% upside, indicating strong conviction in the growth story.
- Forward PE of 16.4x is attractive: The forward PE of 16.39x is significantly lower than the trailing PE of 25.17x, implying the market expects substantial earnings growth. This is supported by analyst EPS estimates of $43.65 for the next fiscal year, which would justify a higher multiple.
Bearish
- Stock down 36% from 52-week high: ULTA trades at $521.46, 36% below its 52-week high of $714.97, and near the low of $443.60. The stock has underperformed the S&P 500 by 20.2% over the past year, reflecting persistent bearish sentiment.
- PEG ratio of 22.87x signals overvaluation: The PEG ratio of 22.87x is extremely high, suggesting that the current earnings growth rate does not justify the valuation. This implies that either growth will decelerate sharply or the market is pricing in unrealistic expectations.
- Gross margin pressure persists: Gross margin of 40.1% in Q1 FY2026 is below the 40.4% in Q3 FY2025, indicating ongoing cost pressures. Rising input costs and promotional activity could further compress margins, impacting profitability.
- High short interest and volatility: The short ratio of 4.04 indicates significant bearish positioning, and the stock's beta of 0.852 does not fully shield it from market swings. The 6-month price change of -23.6% shows high volatility and downside risk.
ULTA Technical Analysis
Ulta Beauty's stock is in a clear downtrend over the past year, with a 1-year price change of just +0.25% compared to the S&P 500's +20.48%, reflecting significant underperformance. The current price of $521.46 sits at approximately 38% of its 52-week range (low of $443.60, high of $714.97), indicating the stock is closer to its lows than its highs, which suggests a bearish or value-oriented positioning. This placement near the lower end of the range implies that the market is pricing in pessimism, but it could also represent a potential value opportunity if fundamentals stabilize.
Beta
0.85
0.85x market volatility
Max Drawdown
-36.2%
Largest decline past year
52-Week Range
$444-$715
Price range past year
Annual Return
+0.2%
Cumulative gain past year
| Period | ULTA Return | S&P 500 |
|---|---|---|
| 1m | +7.8% | +3.6% |
| 3m | +1.2% | +2.7% |
| 6m | -23.6% | +11.4% |
| 1y | +0.2% | +18.7% |
| ytd | -15.9% | +12.3% |
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ULTA Fundamental Analysis
Revenue growth has been robust, with the most recent quarter (Q1 FY2026, ended May 2, 2026) showing revenue of $3.16 billion, up 11.1% year-over-year, accelerating from the prior quarter's 4.2% growth (Q4 FY2025). This acceleration is driven by strong retail store sales of $1.74 billion and e-commerce sales of $294 million, while salon services contributed $77 million. The multi-quarter trend shows revenue growth improving from 0.8% in Q2 FY2025 to 11.1% in Q1 FY2026, indicating a positive trajectory. However, the company's gross margin of 40.1% in Q1 is slightly below the 40.4% in Q3 FY2025, suggesting some pressure, but operating margin improved to 14.2% from 12.3% in Q4, reflecting operational leverage.
Quarterly Revenue
$3.2B
2026-05
Revenue YoY Growth
+11.1%
YoY Comparison
Gross Margin
40.1%
Latest Quarter
Free Cash Flow
$1.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ULTA Overvalued?
Given that Ulta Beauty is profitable, the primary valuation metric selected is the price-to-earnings (PE) ratio. The trailing PE is 25.17x, while the forward PE is 16.39x, indicating that the market expects significant earnings growth, as the forward multiple is substantially lower. This gap implies that analysts anticipate a sharp increase in earnings, likely driven by the company's raised profit outlook. The stock's PEG ratio of 22.87x is extremely high, suggesting that the current earnings growth rate is not sufficient to justify the valuation, or that growth is expected to decelerate sharply.
PE
25.2x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 12x~23x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
16.8x
Enterprise Value Multiple
Investment Risk Disclosure
Financially, Ulta Beauty carries moderate debt with a debt-to-equity ratio of 0.78, which is manageable but not negligible. The company's free cash flow of $1.05B TTM provides a cushion, but the high PEG ratio of 22.87x implies that any earnings miss could lead to a sharp de-rating. Gross margin pressure, with Q1 at 40.1% versus 40.4% in Q3 FY2025, indicates rising input costs that could erode profitability if not offset by pricing power. Additionally, revenue concentration in the US market (with international operations still small) exposes the company to domestic consumer spending cycles, which are currently uncertain given stagflation fears.