Five Below (NASDAQ:FIVE – Get Free Report) and Ulta Beauty (NASDAQ:ULTA – Get Free Report) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, risk, valuation, institutional ownership and dividends.
Earnings and Valuation
This table compares Five Below and Ulta Beauty”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Five Below | $3.88 billion | 1.75 | $253.61 million | $4.77 | 25.82 |
| Ulta Beauty | $11.30 billion | 1.88 | $1.20 billion | $25.60 | 18.49 |
Institutional and Insider Ownership
90.4% of Ulta Beauty shares are held by institutional investors. 1.9% of Five Below shares are held by company insiders. Comparatively, 0.2% of Ulta Beauty shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Volatility & Risk
Five Below has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, Ulta Beauty has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current recommendations and price targets for Five Below and Ulta Beauty, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Five Below | 1 | 14 | 6 | 0 | 2.24 |
| Ulta Beauty | 1 | 11 | 13 | 0 | 2.48 |
Five Below currently has a consensus price target of $112.40, indicating a potential downside of 8.75%. Ulta Beauty has a consensus price target of $462.22, indicating a potential downside of 2.37%. Given Ulta Beauty’s stronger consensus rating and higher probable upside, analysts clearly believe Ulta Beauty is more favorable than Five Below.
Profitability
This table compares Five Below and Ulta Beauty’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Five Below | 6.52% | 17.00% | 6.89% |
| Ulta Beauty | 10.45% | 49.73% | 20.15% |
Summary
Ulta Beauty beats Five Below on 12 of the 14 factors compared between the two stocks.
About Five Below
Five Below, Inc. operates as a specialty value retailer in the United States. The company offers range of accessories, which includes novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polish, lip gloss, fragrance, and branded cosmetics; and personalized living space products, such as lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, accent furniture, and related items, as well as provides storage options. It provides assortment of sports balls, team sports merchandise, and fitness accessories comprising hand weights, jump ropes, and gym balls; various games, such as board games, puzzles, collectibles, and toys, including remote control; and summer season sports, which includes pool, beach, and outdoor toys, as well as games and accessories. In addition, the company offers accessories for cell phones, tablets, audio, and computers, as well as cases, chargers, headphones, and other related items; and media products including books, video games, and DVDs. It also provides assortment of craft activity kits, and arts and crafts supplies, such as crayons, markers, and stickers; and school products comprising backpacks, fashion notebooks and journals, novelty pens and pencils, and locker accessories. Further, the company offers party products, which includes party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food products, as well as sells chilled drinks through coolers; and provides seasonally specific items used to celebrate and decorate for events. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was incorporated in 2002 and is headquartered in Philadelphia, Pennsylvania.
About Ulta Beauty
Ulta Beauty, Inc. operates as a specialty beauty retailer in the United States. The company offers branded and private label beauty products, including cosmetics, fragrance, haircare, skincare, bath and body products, professional hair products, and salon styling tools through its Ulta Beauty stores, shop-in-shops, Ulta.com website, and its mobile applications. It also offers beauty services, including hair, makeup, brow, and skin services at its stores. The company was formerly known as ULTA Salon, Cosmetics & Fragrance, Inc. and changed its name to Ulta Beauty, Inc. in January 2017. Ulta Beauty, Inc. was incorporated in 1990 and is based in Bolingbrook, Illinois.
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