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Ulta Beauty (ULTA) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Ulta Beauty (ULTA - Free Report) closed at $381.07, marking a -0.19% move from the previous day. This move lagged the S&P 500's daily gain of 0.42%.

Coming into today, shares of the beauty products retailer had gained 3.69% in the past month. In that same time, the Retail-Wholesale sector gained 6.5%, while the S&P 500 gained 7.03%.

ULTA will be looking to display strength as it nears its next earnings release, which is expected to be December 2, 2021. In that report, analysts expect ULTA to post earnings of $2.39 per share. This would mark year-over-year growth of 45.73%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.89 billion, up 21.53% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $15.09 per share and revenue of $8.35 billion, which would represent changes of +223.82% and +35.77%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for ULTA. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.29% higher. ULTA is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that ULTA has a Forward P/E ratio of 25.31 right now. This valuation marks a premium compared to its industry's average Forward P/E of 14.8.

It is also worth noting that ULTA currently has a PEG ratio of 1.95. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Miscellaneous industry currently had an average PEG ratio of 1.06 as of yesterday's close.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 158, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ULTA in the coming trading sessions, be sure to utilize Zacks.com.


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