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

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Ulta Beauty (ULTA - Free Report) closed the most recent trading day at $328.12, moving +1.56% from the previous trading session. This change outpaced the S&P 500's 0.83% gain on the day. At the same time, the Dow added 0.93%, and the tech-heavy Nasdaq gained 0.9%.

Prior to today's trading, shares of the beauty products retailer had lost 8.21% over the past month. This has lagged the Retail-Wholesale sector's loss of 2.72% and the S&P 500's loss of 2.38% in that time.

Wall Street will be looking for positivity from ULTA as it approaches its next earnings report date. This is expected to be August 29, 2019. The company is expected to report EPS of $2.79, up 13.41% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.68 billion, up 12.65% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.96 per share and revenue of $7.54 billion. These totals would mark changes of +19.45% and +12.21%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for ULTA. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ULTA currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that ULTA has a Forward P/E ratio of 24.93 right now. Its industry sports an average Forward P/E of 9.65, so we one might conclude that ULTA is trading at a premium comparatively.

Also, we should mention that ULTA has a PEG ratio of 1.36. 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. ULTA's industry had an average PEG ratio of 1.38 as of yesterday's close.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 148, putting it in the bottom 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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