Ulta Beauty (ULTA) Looks to Trade Higher on Q4 Report

What's Happening With ULTA View more about ULTA >

Ulta Beauty (ULTA) reports fourth-quarter numbers after the market close March 14. Analysts expect earnings of $3.55 per share on revenue of $2.13 billion, versus $2.75 and $1.94 billion during the same period last year. ULTA stock is up 24.4% on the year.

Technical Analysis

ULTA was recently trading at $303.22 down $19.27 from its 12-month high and $104.07 above its 12-month low. InvestorsObserver’s Stock Score Report gives ULTA a 89 long-term technical score and a 69 short-term technical score. The stock has recent support above $290 and recent resistance below $319. Of the 22 analysts who cover the stock 15 rate it Strong Buy, 1 rate it Buy, 6 rate it Hold, 0 rate it Sell, and 0 rate it Strong Sell, ULTA gets a score of 76 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

ULTA stock is trading in the upper end of its 52-week range, and the stock will likely break to a new high and use its current high of $322.49 as a new level of support if the company is able to post better than expected numbers for its most recent quarter. The company has a string of three consecutive earnings beats, and the street expects a small beat this quarter with a whisper number of $3.58. Other than a selloff in December during the overall market correction, Ulta Beauty stock has trended steadily higher over the last year, and with strong recent and expected earnings growth the market will likely continue to push shares higher barring any miss.

Ulta has shown annual earnings growth of 27% over the last five years and looking ahead analysts forecast profits will continue to rise at an annual rate of 19.3%. The stock’s valuation is a small concern. ULTA trades at 28 times earnings and 24 times future earnings, meaning the stock is priced for perfection. Given the strong growth forecast the valuation does not indicate the stock is trading in overbought territory, but it does mean that there is very little room for error in the quarterly numbers. Current shareholders should have an exit strategy in place should the stock move lower on any negative surprise.

ULTA
About Ulta Beauty Inc.

Ulta Salon Cosmetics & Fragrance is a North American beauty retailer for cosmetics, skin-care products, fragrance, hair-care products, and salon services. The company offers products from over 500 beauty brands across all categories and price points, including its own private label. Additionally, Ulta offers full-service salon in every store, featuring hair, skin, and brow services. Its stores are predominantly located in convenient and high-traffic locations. A typical Ulta store has more than 20,000 prestige, mass, and professional beauty products.

Already a member?

Login to see your Stocks to Watch Trade Ideas.

Not yet a member?

Receive a Morning Action trade idea every market day in the Morning Update, plus Stocks to Watch Trade Ideas every Saturday.

Become A Member

|