Ulta Beauty (ULTA) AI Stock Analysis

• Market Cap: $30.45B
• Dividend Yield: N/A
• Average Volume (3M): 485.27K
• Price to Earnings (P/E): 26.2
• Beta (1Y): 0.68
• Revenue Growth: 5.45%
• EPS Growth: 4.28%
• Country: US
• Employees: 20,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 5.14
• Shares Outstanding: 44,362,170
• 10 Day Avg. Volume: 414,783
• 30 Day Avg. Volume: 485,270
• PEG Ratio: -5.73
• Price to Book (P/B): 7.82
• Price to Sales (P/S): 1.72
• P/FCF Ratio: 20.18
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 2.76
• Enterprise Value/Gross Profit: 7.04
• Enterprise Value/Ebitda: 17.69
• 1Y Price Target: $702.50
• Price Target Upside: 0.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21
• EPS Forecast (FY): 28.5
• Revenue Forecast (FY): $13.12B

• Rating: 69 Neutral
• Price Target: $740.00 ▲(6.38% Upside)
• Action: Downgraded Date: 01/21/26
• Date: Action: Downgraded 01/21/26

The score is driven primarily by solid underlying profitability and meaningful free cash flow, tempered by slowing TTM growth, margin compression, rising leverage, and weaker cash-flow coverage. Technicals support the uptrend, but overbought signals add near-term risk. Valuation is less attractive at a ~25.9 P/E without dividend support, while the latest earnings call was constructive due to strong results and raised guidance despite margin/SG&A pressure.

Positive Factors

Free Cash Flow Generation

Sizable and growing FCF (~$1.04B, +9.3% TTM) provides a durable internal funding source for reinvestment, store and digital expansion, and loyalty-program investment. Strong FCF also cushions execution risk and supports capital returns or debt paydown over multiple quarters.

High Underlying Profitability

Healthy gross and net margins indicate persistent earnings power in specialty beauty retail, enabling Ulta to absorb promotions or investments while remaining profitable. Margin strength supports return on capital and funds customer initiatives, making the business resilient over many quarters.

Loyalty & Omnichannel Scale

A 46.3M-member loyalty base and strong e‑commerce/app engagement create durable repeat-purchase economics and rich customer data. This scale supports higher lifetime value, targeted marketing, and resilience to competition, reinforcing long-term share gains across channels.

Negative Factors

Slowing Revenue Growth

A material deceleration in top-line growth reduces the tailwind from scale and limits operating leverage. If sustained, slower revenue expansion can compress long-run profit growth, constrain reinvestment capacity, and make SG&A increases harder to absorb without margin recovery.

SG&A Deleverage and Margin Compression

Material SG&A step-up drove operating margin from 12.6% to 10.8%, showing sensitivity of profit margins to cost/investment decisions. Persistent deleverage raises the break-even point, making earnings more exposed if sales decelerate or promotional intensity rises over coming quarters.

Rising Leverage and Weaker Cash Coverage

Debt roughly equal to equity and rising total debt reduce financial flexibility to fund growth or absorb shocks. Weaker operating-cash coverage (OCF covers ~51% of total debt) limits ability to deleverage quickly, increasing refinancing and cyclical risks over multiple quarters.

Ulta Beauty Business Overview & Revenue Model

Company Description

Ulta Beauty, Inc. operates as a retailer of beauty products in the United States. The company's stores offer cosmetics, fragrances, skincare and haircare products, bath and body products, and salon styling tools; professional hair products; salon services, including hair, skin, makeup, and brow services; and nail services. It also provides its private label products, such as the Ulta Beauty Collection branded cosmetics, skincare, and bath products, as well as Ulta Beauty branded products; and the Ulta Beauty branded gifts. As of March 10, 2022, the company operated 1,308 retail stores across 50 states. It also distributes its products through its website ulta.com; and mobile applications. 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.

How the Company Makes Money

Ulta Beauty generates revenue primarily through the sale of beauty products and salon services. Its key revenue streams include product sales from a comprehensive assortment of brands, including exclusive lines and well-known cosmetics, skin, and hair care brands. Additionally, Ulta earns income from salon services, which include haircuts, coloring, and various beauty treatments. The company also benefits from loyalty programs, such as the Ultamate Rewards program, which encourages repeat purchases and customer retention. Significant partnerships with beauty brands and exclusive product launches further contribute to its earnings, as they enhance the product mix available to consumers and drive foot traffic to stores. The combination of retail sales and services, along with strategic marketing and partnerships, solidifies Ulta's revenue model.

Ulta Beauty Financial Statement Overview

Summary

Profitability remains solid (TTM gross margin ~39%, net margin ~9.9%) and free cash flow is sizable (~$1.04B, ~9.3% growth). However, revenue growth has slowed (TTM +2.8%), margins have compressed versus prior years, leverage has risen (debt-to-equity ~1.0), and cash-flow coverage/conversion is weaker (FCF ~73% of net income; OCF ~51% of total debt).

Income Statement

TTM (Trailing-Twelve-Months) revenue rose 2.8%, showing continued growth but a clear slowdown versus the strong expansion seen in prior years. Profitability remains solid for specialty retail (TTM gross margin ~39% and net margin ~9.9%), though margins have compressed from FY2023–FY2024 levels (net margin and operating margin both lower), signaling higher costs and/or more promotional intensity. Overall: still strong earnings power, but momentum and margin trajectory have softened.

Balance Sheet

Leverage is moderate-to-elevated with TTM debt roughly in line with equity (debt-to-equity ~1.0), and total debt has increased versus recent annual periods. Offsetting this, profitability on shareholder capital remains very strong (TTM return on equity ~47%), supporting balance-sheet resilience. Key watch item is the rising debt load relative to equity, which reduces flexibility if operating conditions weaken.

Cash Flow

Cash generation is positive with TTM free cash flow of about $1.04B and ~9.3% growth, indicating healthy underlying cash profitability. However, cash conversion is weaker: free cash flow is ~73% of net income and operating cash flow covers only ~51% of total debt in the TTM period, suggesting less balance-sheet coverage from annual operating cash flow than in prior years. Strength is consistent free cash flow; weakness is reduced coverage and conversion compared with earlier periods.

Breakdown	TTM	Jan 2025	Jan 2024	Jan 2023	Jan 2022	Jan 2021
Income Statement
Total Revenue	11.98B	11.30B	11.21B	10.21B	8.63B	6.15B
Gross Profit	4.70B	4.39B	4.38B	4.04B	3.37B	1.95B
EBITDA	1.87B	1.85B	1.94B	1.88B	1.57B	534.59M
Net Income	1.19B	1.20B	1.29B	1.24B	985.84M	175.84M
Balance Sheet
Total Assets	7.01B	6.00B	5.71B	5.37B	4.76B	5.09B
Cash, Cash Equivalents and Short-Term Investments	204.92M	703.20M	766.59M	737.88M	431.56M	1.05B
Total Debt	2.57B	1.92B	1.91B	1.90B	1.85B	1.90B
Total Liabilities	4.38B	3.51B	3.43B	3.41B	3.23B	3.09B
Stockholders Equity	2.63B	2.49B	2.28B	1.96B	1.54B	2.00B
Cash Flow
Free Cash Flow	1.04B	964.15M	1.04B	1.17B	887.08M	658.49M
Operating Cash Flow	1.36B	1.34B	1.48B	1.48B	1.06B	810.36M
Investing Cash Flow	-731.95M	-383.09M	-441.43M	-314.58M	-176.48M	-48.75M
Financing Cash Flow	-598.90M	-1.02B	-1.01B	-861.01M	-1.50B	-107.93M

Ulta Beauty Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 695.63
• 50DMA: Positive
• 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 ULTA, the sentiment is Positive. The current price of 695.63 is above the 20-day moving average (MA) of 676.21, above the 50-day MA of 651.45, and above the 200-day MA of 541.47, indicating a bullish trend. The MACD of 9.92 indicates Positive momentum. The RSI at 54.68 is Neutral, neither overbought nor oversold. The STOCH value of 36.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ULTA.

Ulta Beauty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ULTA	69 Neutral	$30.45B	26.23	47.97%	―	5.45%	4.28%
SBH	64 Neutral	$1.57B	9.10	24.38%	―	-0.42%	31.64%
EBAY	63 Neutral	$38.21B	19.66	40.85%	1.38%	4.89%	17.30%
CHWY	63 Neutral	$10.57B	54.64	59.58%	―	9.80%	-46.84%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ETSY	55 Neutral	$5.24B	39.38	―	―	1.98%	-20.98%
BBWI	53 Neutral	$4.76B	7.15	―	4.16%	-1.04%	-20.88%

Ulta Beauty Corporate Events

Ulta Beauty Adopts Standardized Executive Severance Plan Framework

On December 15, 2025, Ulta Beauty, Inc. adopted a new Executive Severance Plan that standardizes severance and benefits for its executive officers in the event of an involuntary termination without cause, excluding terminations tied to a change in control, death, or disability. Under the plan, eligible executives will receive two times base salary paid over 24 months, a cash lump sum equal to one times the lower of their target or actual annual bonus for the year of termination, and up to 12 months of company-paid COBRA premiums, contingent on signing a release of claims and complying with restrictive covenants for 24 months; the plan replaces prior severance arrangements for executives but leaves intact the company’s existing change-in-control severance framework, signaling a move toward more unified and predictable executive exit terms for stakeholders.

The most recent analyst rating on (ULTA) stock is a Buy with a $700.00 price target. To see the full list of analyst forecasts on Ulta Beauty stock, see the ULTA Stock Forecast page.