Knowing facts before you bet on it

Ulta beauty (Ulta) is one of the stocks that have recently been viewed by Zacks.com visitors. So it could be a good idea to check some of the factors that could influence the short -term performance of the share.

The shares of this retailer for beauty products have returned +8.1% compared to the Zacks S&P 500 Composite's +11.3% change last month. The Zacks Retail – Miscellaneous Industry, to which Ulta belongs, has increased 9.6% during this period. Now the main question is: where could the inventory be directed at short notice?

While media publications or rumors about a significant change in the business prospects of a company usually carry out its shares as a “trend” and lead to an immediate change in price, there are always some basic facts that ultimately dominate the purchase and hate decision finding.

Here at Zacks we prioritize the evaluation of the change in the projection of the future income of a company above all. This is because we believe that the current value of his future profit current determines the current value for its shares.

We essentially take a look at how analysts that cover the shares reveal their profit estimates in order to reflect the effects of the latest business trends. And if the profit estimates for a company rise, the current value for its shares increases. A higher atmosphere to be used than the current market price gives investors the interest for buying the share, which leads at a higher price. For this reason, empirical research shows a strong correlation between trends in the revisions of the yield estimate and short -term share price movements.

For the current quarter, Ulta is expected to make a profit of $ 5.73 per share, which indicates a change of -11.4% compared to the previous year. The Zacks Consensus estimate has changed +0.1% in the last 30 days.

The consensus rate estimate of $ 23.01 for the current financial year shows a change of -9.2%compared to the previous year. This estimate has changed in the last 30 days of -0.2%.

For the next financial year, the consensus estimate of $ 25.53 shows a change of +10.9% compared to what Ulta is expected a year ago. The estimate has changed last month -0.1%.

Our proprietary stock assessment tool, The Zacks Rank, offers a strong externally tested track record and offers a more conclusive picture of the price direction of a share at short notice, as it effectively uses the power of profits. Due to the size of the recent change in the consensus estimate and three other factors in connection with profit estimates, Ulta Zacks ranked number 3 (hold) is evaluated.

The following table shows the development of the company's 12-month consensus EPS EPS estimate:

12-month consensus EPS estimate for Ulta _12monthepScharturl

Although the profit growth of a company is probably the best indicator of its financial health, not much happens if it cannot increase its income. It is almost impossible for a company to increase its income without increasing its sales over long periods of time. It is therefore crucial to know the potential sales growth of a company.

For Ulta, consensus sales for the current quarter of $ 2.79 billion shows a change of +2.2%compared to the previous year. For the current and next financial years, estimates of 11.57 billion US dollars and $ 12.11 billion +2.4% or +4.7% make changes.

Ulta reported sales of $ 3.49 billion in the last quarter, which corresponds to a change of -1.9%compared to the previous year. EPS of $ 8.46 for the same period comparable to USD 8.08 a year ago.

Compared to the Zacks Consensus estimate of 3.46 billion US dollars, the registered income is a surprise of +0.69%. The EPS surprise was +19.15%.

In the last four quarters, Ulta exceeded the consensus EEPS estimates three times. The company has achieved three times consensus sales estimates three times during this period.

No investment decision can be efficient without taking into account the evaluation of a share. Whether the current price of a share rightly reflects the internal value of the underlying business and the growth prospects of the company is an essential determinant for future price -performance.

The comparison of the current value of the valuation multipliers of a company, such as

The Zacks Value Style Score (part of the Zacks Style Scores Systems), which pays attention to the grade of stocks from A to F both traditional and unconventional valuation metrics (AA is better than a C; and so on) is rather helpful to identify whether a share is overrated, legally valued or temporarily accommodated.

Ulta is evaluated on this front B, which points out that it is traded for his colleagues with a discount. Click here to display the values of some evaluation metrics that have driven this grade.

The facts discussed here and a lot of other information about Zacks.com could contribute to determining whether it is worth paying attention to the Ulta market or not. However, the Zacks ranked 3rd indicate that it is in line with the broader market at short notice.

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This article was originally published in Zack's Investment Research (Zacks.com).

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