Zalando (OTCMKTS:ZLNDY) and Ulta Beauty (NASDAQ:ULTA) Head-To-Head Comparison

Zalando (OTCMKTS:ZLNDY) and Ulta Beauty (NASDAQ:ULTA) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Risk and Volatility

Zalando has a beta of 1.46, suggesting that its stock price is 46% more volatile than the S&P 500. Comparatively, Ulta Beauty has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Zalando and Ulta Beauty, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zalando	0	1	1	2	3.25
Ulta Beauty	0	8	24	0	2.75

Ulta Beauty has a consensus price target of $627.83, suggesting a potential upside of 3.43%. Given Ulta Beauty’s higher possible upside, analysts clearly believe Ulta Beauty is more favorable than Zalando.

Profitability

This table compares Zalando and Ulta Beauty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zalando	0.70%	3.46%	1.06%
Ulta Beauty	9.34%	45.40%	17.37%

Institutional & Insider Ownership

90.4% of Ulta Beauty shares are owned by institutional investors. 0.2% of Ulta Beauty shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Zalando and Ulta Beauty”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zalando	$13.97 billion	0.50	$243.36 million	$0.22	65.36
Ulta Beauty	$12.96 billion	2.00	$1.15 billion	$27.44	22.12

Ulta Beauty has lower revenue, but higher earnings than Zalando. Ulta Beauty is trading at a lower price-to-earnings ratio than Zalando, indicating that it is currently the more affordable of the two stocks.

Summary

Ulta Beauty beats Zalando on 10 of the 15 factors compared between the two stocks.

About Zalando

Zalando SE operates an online platform for fashion and lifestyle products. The company operates through Fashion Store and Offprice segments. It provides shoes, apparel, accessories, and beauty products with free delivery and returns, as well as various payment options. The company also sells its products through Lounge by Zalando; and brick-and-mortar outlet stores. It operates in Germany, Austria, Switzerland, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, Hungary, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. The company was founded in 2008 and is headquartered in Berlin, Germany.

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.