One-glance verdict
Undervalued
$788.29 our estimate vs market $592.94
Wall Street consensus: $631.44 (-19.9% lower than our fair-value estimate)
25% below our estimate, below the bear case
Fundamentals snapshot
Ulta Beauty, Inc.
ULTA · NMS · Consumer Cyclical · Specialty Retail
Current price
$592.94
52-week range
$443.60 - $714.97
Market cap
$25.35B
Balance sheet
Watch
866.71x Strong cushion
Net debt $2.31B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 4.5% last year.
- Reward Returns 46.1% on equity, ahead of 80% of its peers.
- Risk Net debt grew 44.8% over 3 years.
- Risk Stock trades 5.1% above its 5-year average P/E.
What this company does
Ulta Beauty, Inc.
Ulta Beauty is a store that sells all sorts of beauty products, from makeup and perfume to skincare and hair tools, and they make their money by selling these items through their physical stores and online. This matters because they are a popular destination for people looking for beauty products, and how much they sell shows how well they are doing with customers.
How the company got here
Ulta Beauty started in 1990 as Ulta3, founded by former retail executives who saw an opportunity to offer a wide range of beauty products, from mass-market to prestige brands, all in one convenient location. This was a departure from the norm, where consumers typically had to choose between drugstores, department stores, or professional salons. The company went public in 2007, which provided capital for expansion. A key turning point was the rebranding to Ulta Beauty in 2017, solidifying its identity as a comprehensive beauty destination. More recently, Ulta has expanded its reach through strategic partnerships, like the Ulta Beauty at Target shop-in-shops, and international ventures, demonstrating a strategy of meeting customers wherever they are.
What it actually does
Ulta Beauty is a specialty retailer focused on beauty and wellness products. Think of it as a one-stop shop for almost anything related to beauty. They sell a vast array of products, including makeup, fragrances, skincare items, haircare products, and tools for styling and application. Beyond just selling products, Ulta Beauty also offers in-store services, such as full-service salons for hair, skin, and brow treatments, creating a comprehensive beauty experience for its customers.
Merchandise Sales
This is the largest part of Ulta's business, where they sell a wide variety of beauty products. This includes everything from makeup and skincare to haircare and fragrances, covering both affordable, mass-market brands and more high-end, prestige labels. Customers can purchase these items in Ulta's physical stores, on their website, or through their mobile app. The revenue from these product sales is the primary driver of Ulta's overall financial performance.
Salon Services
Within Ulta Beauty stores, there are full-service salons that offer a range of beauty treatments. These services include hair styling and coloring, skincare treatments, brow shaping, and makeup application. While this segment generates less revenue than product sales, it's a crucial part of Ulta's strategy to be a complete beauty destination. These services encourage repeat visits and enhance the overall customer experience, often leading to additional product purchases.
What management is betting on now
Ulta Beauty's current strategy focuses on being the ultimate beauty destination by enhancing its product assortment, improving the in-store and online shopping experience, and strengthening its loyalty program. They are expanding their store count and aiming to grow their loyalty program membership significantly. Management is also prioritizing the growth of their wellness offerings and deepening customer engagement through personalization and community building. This approach aims to ensure Ulta remains relevant and continues to attract and retain beauty enthusiasts across all categories and price points.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q4
$-171.07M
FY2026 Q1
$962.64M
FY2026 Q2
$140.99M
FY2026 Q3
$19.57M
FY2026 Q4
$-81.63M
FY2027 Q2
$203.62M
FY2027 Q3
$38.44M
Revenue
$3.04B
Net income
$282.01M
Diluted EPS
6.55
Operating cash flow
$119.70M
Free cash flow
$38.44M
Fetching…
Sources
Revenue
$3.16B
Net income
$340.47M
Diluted EPS
7.74
Operating cash flow
$261.89M
Free cash flow
$203.62M
Fetching…
Sources
Revenue
$2.86B
Net income
$230.88M
Diluted EPS
5.14
Operating cash flow
$5.64M
Free cash flow
$-81.63M
Fetching…
Sources
Revenue
$2.79B
Net income
$260.88M
Diluted EPS
5.78
Operating cash flow
$96.52M
Free cash flow
$19.57M
Fetching…
Sources
Revenue
$2.85B
Net income
$305.05M
Diluted EPS
6.70
Operating cash flow
$220.02M
Free cash flow
$140.99M
Fetching…
Sources
Revenue
$3.49B
Net income
$393.27M
Diluted EPS
8.43
Operating cash flow
$1.04B
Free cash flow
$962.64M
Fetching…
Sources
Revenue
$2.53B
Net income
$242.18M
Diluted EPS
5.14
Operating cash flow
$-56.84M
Free cash flow
$-171.07M
Fetching…
Sources
Is it cheap or expensive?
Fair value $788.29 vs current price $592.94
Wall Street consensus is the average analyst price target: $631.44 (-19.9% lower than our fair-value estimate).
Our most-likely fair value is $788.29 a share — about 32.9% above today's price of $592.94, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $2.3B. Interest coverage 866.7x.
Net debt
$2.31B
Interest coverage
866.71x
Ulta Beauty, Inc.'s profit covers its interest bill about 866.7 times over. which is stronger than every peer shown here.
Watch
Worse cushion
Baseline
Better cushion
ULTA
BASELINE
Ulta Beauty, Inc.
Total debt $2.52B Interest coverage 866.71x This is the baseline the peer rows are being compared against.
Total debt $9.25B Interest coverage 5.02x -99% vs ULTA Carries about 172.6x less debt cushion than ULTA.
Total debt $1.52B Interest coverage 5.09x -99% vs ULTA Carries about 170.3x less debt cushion than ULTA.
Total debt $4.74B Interest coverage 4.08x -100% vs ULTA Carries about 212.4x less debt cushion than ULTA.
Total debt $929.30M Interest coverage 3.22x -100% vs ULTA Carries about 269.2x less debt cushion than ULTA.
What you should know
The case for and against ULTA
3 Rewards
3 Risks
Rewards
-
Revenue grew 4.5% last year.
-
Returns 46.1% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 44.8% over 3 years.
-
Stock trades 5.1% above its 5-year average P/E.
-
Operating margin compressed from 16.2% to 12.5% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
21.61x
Forward P/E
18.48x
P/B
9.60x
P/S
1.96x
EV/EBITDA
14.30x
PEG ratio
1.86x
Profitability
How much profit each dollar creates
Gross margin
43.1%
Operating margin
12.5%
Net margin
9.3%
ROE
46.1%
ROA
14.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.95x
Current ratio
1.34x
Quick ratio
0.20x
Total debt
$2.52B
Total cash
$213.45M
Growth
How the business has been compounding
Revenue TTM
$12.96B
Revenue 5Y CAGR
9.5%
EPS TTM
27.44
EPS 5Y CAGR
2.2%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.57B
Free CF TTM
$1.07B
FCF margin
8.2%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2012-03-16