Critical Survey: Ulta Beauty (ULTA) & Its Competitors

Ulta Beauty (NASDAQ:ULTA) is one of 285 publicly-traded companies in the “Specialty Retail” industry, but how does it weigh in compared to its rivals? We will compare Ulta Beauty to similar businesses based on the strength of its valuation, dividends, risk, profitability, analyst recommendations, institutional ownership and earnings.

Risk & Volatility

Ulta Beauty has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Ulta Beauty’s rivals have a beta of 1.91, suggesting that their average stock price is 91% more volatile than the S&P 500.

Profitability

This table compares Ulta Beauty and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ulta Beauty	9.34%	45.40%	17.37%
Ulta Beauty Competitors	-3.69%	-13.97%	3.17%

Earnings & Valuation

This table compares Ulta Beauty and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Ulta Beauty	$12.39 billion	$1.15 billion	24.08
Ulta Beauty Competitors	$7.06 billion	$386.47 million	32.76

Ulta Beauty has higher revenue and earnings than its rivals. Ulta Beauty is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Institutional & Insider Ownership

90.4% of Ulta Beauty shares are held by institutional investors. Comparatively, 51.6% of shares of all “Specialty Retail” companies are held by institutional investors. 0.2% of Ulta Beauty shares are held by company insiders. Comparatively, 20.5% of shares of all “Specialty Retail” companies 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.

Analyst Recommendations

This is a summary of current ratings and target prices for Ulta Beauty and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ulta Beauty	0	8	23	1	2.78
Ulta Beauty Competitors	3667	15575	21603	590	2.46

Ulta Beauty presently has a consensus target price of $631.30, suggesting a potential downside of 4.45%. As a group, “Specialty Retail” companies have a potential upside of 4.75%. Given Ulta Beauty’s rivals higher possible upside, analysts clearly believe Ulta Beauty has less favorable growth aspects than its rivals.

Summary

Ulta Beauty beats its rivals on 9 of the 13 factors compared.

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.