Important note

This AI stock analysis for Ulta Beauty is not up to date. Creating and accessing our AI stock Analysis (powered by our data and Chat GPT) is only available for our premium users. Sign up to get access today!

Ulta Beauty - AI Stock Analysis

Analysis generated May 24, 2024

Ulta Beauty, Inc., headquartered in Bolingbrook, Illinois, is a premier beauty retailer in the United States. The company operates a chain of beauty stores, offering a wide range of cosmetics, skincare, hair care, and fragrance products. Additionally, Ulta Beauty provides salon services. Known for its distinct combination of beauty products and salon services, Ulta has established a strong and loyal customer base.

Fundamental Analysis

The company's revenue for the last quarter was $3.55 billion, showcasing a notable increase of 42.80% from the previous quarter. This sharp uptick signals robust growth. Moreover, when compared to the same quarter last year, there's a positive year-over-year growth of 10.15%. This upward trend in revenue is promising and indicates the company's resilience and ability to capture market share.

The net income for the last quarter stood at $394 million, a significant 58.07% increase from the previous quarter. Year-over-year, the net earnings increased by 15.74%. The increase in net income suggests improved profitability and efficient cost management.

The EBITDA for the last quarter was $586 million, reflecting a 48.12% rise compared to the previous quarter. Year-over-year, the EBITDA rose by 30.89%, which underscores the company's strong operating performance.

Ulta Beauty's current Price-to-Earnings (P/E) ratio is 14.53, which indicates a reasonable valuation. It is neither excessively high nor too low, suggesting that the stock is fairly valued given its earnings.

However, insider selling has been noted in recent months, which could be a bearish signal and may suggest that insiders expect a potential decline in the stock's performance.

Technical Analysis

Currently, Ulta Beauty's stock price is $381.78, representing a 7.01% decrease from last month. Over a year, the stock has fallen by 21.30%, which could be a concern for long-term investors.

The Simple Moving Average over 10 days (SMA10) is $390.77, slightly down from the previous SMA10 of $392.76. This downward movement may indicate a potentially bearish trend in the stock's price.

The Relative Strength Index (RSI) is at 19.9, suggestive of an oversold condition. An RSI below 30 typically signals that the stock is oversold, indicating a potential for a bullish reversal.

Alternative Data Analysis

Ulta Beauty has 7,700 open positions, which have increased by 17% in the past few months. This hiring surge suggests plans for expansion and growth, which is generally a positive sign.

However, the number of visitors to Ulta Beauty's website stands at an estimated 28 million, down by 22% over the past few months. Similarly, daily mobile app downloads are around 7,700, down by 10%. These declining numbers raise concerns about potential customer attrition.

The company's Instagram page has 7.2 million followers, with no significant change recently, while the Twitter account has 690,000 followers, also stagnant. A lack of growth in social media engagement can be a warning sign of waning customer interest.

The AltIndex AI score, which aggregates data from fundamental, technical, and alternative sources, gives Ulta Beauty a score of 36, indicating a sell signal.

Conclusion and Recommendation

While Ulta Beauty demonstrates strong growth in revenue, net income, and EBITDA, coupled with a reasonable P/E ratio, there are several concerns. The recent stock price decline, bearish technical indicators, and insider selling suggest caution. Moreover, alternative data points to potential issues with customer acquisition and engagement.

Based on the comprehensive analysis, including fundamental, technical, and alternative data, the outlook for Ulta Beauty is mixed. While the company shows strong operational performance, the stock may face short-term headwinds and declining customer interest. For investors looking for stability and growth, it might be prudent to wait for clearer signs of recovery before investing. Therefore, the current recommendation would lean towards a "Hold" or "Sell" depending on individual risk tolerance and investment horizon.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.