Ulta Beauty, Inc.
Ulta Beauty, Inc. Fundamental Analysis
Ulta Beauty, Inc. (ULTA) shows moderate financial fundamentals with a PE ratio of 25.49, profit margin of 9.93%, and ROE of 46.87%. The company generates $12.0B in annual revenue with weak year-over-year growth of 0.79%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 60.1/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze ULTA's fundamental strength across five key dimensions:
Efficiency Score
ExcellentULTA demonstrates superior asset utilization.
Valuation Score
ModerateULTA shows balanced valuation metrics.
Growth Score
WeakULTA faces weak or negative growth trends.
Financial Health Score
ExcellentULTA maintains a strong and stable balance sheet.
Profitability Score
ModerateULTA maintains healthy but balanced margins.
Key Financial Metrics
Is ULTA Expensive or Cheap?
P/E Ratio
ULTA trades at 25.49 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, ULTA's PEG of 0.25 indicates potential undervaluation.
Price to Book
The market values Ulta Beauty, Inc. at 11.52 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 15.01 times EBITDA. This signals the market has high growth expectations.
How Well Does ULTA Make Money?
Net Profit Margin
For every $100 in sales, Ulta Beauty, Inc. keeps $9.93 as profit after all expenses.
Operating Margin
Core operations generate 13.24 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $46.87 in profit for every $100 of shareholder equity.
ROA
Ulta Beauty, Inc. generates $16.97 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Ulta Beauty, Inc. produces operating cash flow of $1.36B, showing steady but balanced cash generation.
Free Cash Flow
Ulta Beauty, Inc. produces free cash flow of $1.04B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $23.27 in free cash annually.
FCF Yield
ULTA converts 3.41% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
25.49
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.25
vs 25 benchmark
P/B Ratio
Price to book value ratio
11.52
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.54
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.98
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.33
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.47
vs 25 benchmark
ROA
Return on assets percentage
0.17
vs 25 benchmark
ROCE
Return on capital employed
0.35
vs 25 benchmark
How ULTA Stacks Against Its Sector Peers
| Metric | ULTA Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 25.49 | 25.25 | Neutral |
| ROE | 46.87% | 1170.00% | Weak |
| Net Margin | 9.93% | 742.00% | Weak |
| Debt/Equity | 0.98 | 0.77 | Weak (High Leverage) |
| Current Ratio | 1.33 | 9.19 | Neutral |
| ROA | 16.97% | -6467.00% (disorted) | Strong |
ULTA outperforms its industry in 1 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Ulta Beauty, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
87.07%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
108.47%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
48.93%
Industry Style: Cyclical, Growth, Discretionary
High Growth