Sally Beauty (SBH) AI Stock Analysis

• Market Cap: $1.47B
• Dividend Yield: N/A
• Average Volume (3M): 1.69M
• Price to Earnings (P/E): 7.9
• Beta (1Y): 1.02
• Revenue Growth: -0.42%
• EPS Growth: 31.64%
• Country: US
• Employees: 12,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.55
• Shares Outstanding: 98,266,495
• 10 Day Avg. Volume: 1,547,620
• 30 Day Avg. Volume: 1,687,469
• PEG Ratio: 0.26
• Price to Book (P/B): 5.57
• Price to Sales (P/S): 0.44
• P/FCF Ratio: 5.96
• Enterprise Value/Market Cap: 2.08
• Enterprise Value/Revenue: 0.83
• Enterprise Value/Gross Profit: 1.61
• Enterprise Value/Ebitda: 7.64
• 1Y Price Target: $15.88
• Price Target Upside: 5.94% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 2.06
• Revenue Forecast (FY): $3.74B

• Rating: 76 Outperform
• Price Target: $17.50 ▲(16.74% Upside)

Sally Beauty's strong earnings call and attractive valuation are the most significant factors driving the score. The company's stable financial performance and positive technical indicators further support the stock's potential. Challenges in revenue growth and financial stability are noted but are outweighed by the company's strategic initiatives and market positioning.

Positive Factors

Cash Generation

Strong cash generation enhances financial flexibility, enabling reinvestment in growth initiatives and debt reduction, supporting long-term stability.

Strategic Initiatives

Strategic initiatives like color segment growth and digital expansion position Sally Beauty to capture market share and drive sustained profitability.

Partnership with DoorDash

The partnership with DoorDash enhances distribution channels, increasing accessibility and potentially boosting sales through innovative delivery solutions.

Negative Factors

Revenue Growth Challenges

Stagnant revenue growth can limit market expansion and affect long-term profitability, necessitating strategic adjustments to drive sales.

High Debt Levels

High debt levels can strain financial resources, limiting investment capacity and increasing vulnerability to economic downturns.

Flat Comparable Transactions

Flat transaction growth indicates potential market saturation or competitive pressures, which could hinder future revenue expansion.

Sally Beauty Business Overview & Revenue Model

Company Description

Sally Beauty Holdings, Inc. operates as a specialty retailer and distributor of professional beauty supplies. The company operates through two segments, Sally Beauty Supply and Beauty Systems Group. The Sally Beauty Supply segment offers beauty products, including hair color and care products, skin and nail care products, styling tools, and other beauty products for retail customers, salons, and salon professionals. This segment also provides products under third-party brands, such as Wella, Clairol, OPI, Conair, and L'Oreal, as well as exclusive-label brand merchandise. The Beauty Systems Group segment offers professional beauty products, such as hair color and care products, skin and nail care products, styling tools, and other beauty items directly to salons and salon professionals through its professional-only stores, e-commerce platforms, and sales force, as well as through franchised stores under the Armstrong McCall store name. This segment also sells products under third-party brands, such as Paul Mitchell, Wella, Matrix, Schwarzkopf, Kenra, Goldwell, Joico, and Olaplex. As of September 30, 2021, the company operated 4,777 stores, including 134 franchised units in the United States, Puerto Rico, Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium, France, the Netherlands, Spain, and Germany. It also distributes its products through full-service/exclusive distributors, open-line distributors, direct sales, and mega-salon stores. Sally Beauty Holdings, Inc. was founded in 1964 and is headquartered in Denton, Texas.

How the Company Makes Money

Sally Beauty generates revenue primarily through the sale of beauty products in its retail stores and online platforms. Key revenue streams include sales from its Sally Beauty Supply stores, which cater to both retail customers and professionals, and its Beauty Systems Group segment, which supplies salon professionals with high-quality beauty products. The company also benefits from private label brands, which typically offer higher margins compared to third-party brands. Additionally, Sally Beauty has established relationships with various professional beauty brands, allowing them to offer exclusive products that attract customers. Their loyalty programs and promotional sales further drive customer retention and increase sales volume, contributing significantly to their overall earnings.

Sally Beauty Financial Statement Overview

Summary

Sally Beauty's financial statements reflect stable profitability with consistent margins and strong cash flow generation. However, revenue growth remains a challenge, and while leverage management has improved, financial stability could be further enhanced.

Income Statement

Sally Beauty has shown a consistent gross profit margin around 50%, indicating stable cost management. The net profit margin has improved to 5.29% in the latest year, reflecting enhanced profitability. Revenue growth has been volatile, with a notable decline in recent years, but the EBIT and EBITDA margins have shown resilience, maintaining healthy levels. Overall, the income statement reflects a stable profitability profile with some concerns about revenue growth.

Balance Sheet

The company's debt-to-equity ratio has improved significantly from extremely high levels, indicating better financial leverage management, but it remains relatively high at 1.83. Return on equity has improved to 66.58%, suggesting efficient use of equity. However, the equity ratio remains low, highlighting potential risks in financial stability. The balance sheet shows progress in reducing leverage but still indicates a need for cautious financial management.

Cash Flow

Sally Beauty has demonstrated strong free cash flow growth of 47.06% recently, indicating improved cash generation capabilities. The operating cash flow to net income ratio is healthy, suggesting good cash conversion. The free cash flow to net income ratio of 1.0 reflects strong cash flow relative to earnings. Overall, the cash flow statement indicates robust cash generation, supporting financial flexibility.

Breakdown	TTM	Dec 2025	Dec 2025	Dec 2024	Dec 2023	Dec 2022
Income Statement
Total Revenue	3.70B	―	3.70B	3.72B	3.73B	3.82B
Gross Profit	1.91B	―	1.91B	1.89B	1.89B	1.94B
EBITDA	402.01M	―	427.73M	393.50M	441.06M	493.06M
Net Income	195.88M	―	195.88M	153.41M	184.60M	183.55M
Balance Sheet
Total Assets	2.87B	―	2.87B	2.79B	2.73B	2.58B
Cash, Cash Equivalents and Short-Term Investments	149.16M	―	149.16M	107.96M	123.00M	70.56M
Total Debt	1.56B	―	1.56B	1.60B	1.68B	1.73B
Total Liabilities	2.08B	―	2.08B	2.16B	2.22B	2.28B
Stockholders Equity	794.21M	―	794.21M	628.53M	508.75M	293.64M
Cash Flow
Free Cash Flow	172.69M	―	172.69M	145.36M	158.57M	57.25M
Operating Cash Flow	274.83M	―	274.83M	246.53M	249.31M	156.50M
Investing Cash Flow	-58.28M	―	-58.28M	-108.91M	-99.78M	-102.42M
Financing Cash Flow	-178.42M	―	-178.42M	-153.73M	-100.82M	-373.68M

Sally Beauty Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.99
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SBH, the sentiment is Negative. The current price of 14.99 is below the 20-day moving average (MA) of 15.41, below the 50-day MA of 15.01, and above the 200-day MA of 11.88, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 46.51 is Neutral, neither overbought nor oversold. The STOCH value of 27.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SBH.

Sally Beauty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ULTA	78 Outperform	$26.95B	23.29	47.97%	―	5.45%	4.28%
SBH	76 Outperform	$1.47B	7.93	27.54%	―	-0.42%	31.64%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
OLPX	57 Neutral	$901.14M	-177.63	-0.56%	―	-3.47%	-111.68%
CHWY	54 Neutral	$13.48B	67.09	59.58%	―	9.80%	-46.84%
BBWI	53 Neutral	$4.05B	6.08	―	4.16%	-1.04%	-20.88%
YSG	48 Neutral	$388.24M	-5.78	-13.99%	―	22.58%	33.18%

Sally Beauty Corporate Events

Sally Beauty Reports Q4 Financial Results, EPS Rises

On November 13, 2025, Sally Beauty Holdings reported its financial results for the fourth quarter and full fiscal year ending September 30, 2025. The company saw a 1.3% increase in consolidated net sales for the fourth quarter, with a 10% rise in adjusted diluted EPS. For the full year, GAAP diluted EPS increased by 32%, and the company generated $275 million in cash flow from operations, which was used to invest in growth, strengthen the balance sheet, and return value to shareholders. As Sally Beauty enters fiscal 2026, it remains confident in its strategic initiatives and financial targets, supported by resilient customers and strong core categories.