Ulta Beauty Inc (ULTA, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance. With a current share price of $375.41 and a daily gain of 2.63%, despite a three-month change of -6.19%, the company shows promising signs of substantial growth. A detailed analysis, supported by the GF Score, positions Ulta Beauty Inc for potential market outperformance in the near future.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, evaluating stocks based on five key aspects of valuation from 2006 to 2021. This system has proven to correlate strongly with long-term stock performance. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. Ulta Beauty Inc boasts a GF Score of 94, signaling robust future performance potential.
- Financial strength rank: 6/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 8/10
- Momentum rank: 4/10
Understanding Ulta Beauty Inc's Business
Ulta Beauty Inc, with a market cap of $17.91 billion and annual sales of $11.3 billion, is the largest specialized beauty retailer in the US. Operating 1,385 stores by the end of fiscal 2023 and partnering with Target, the company offers a diverse range of products including makeup, fragrances, skincare, and hair care, along with private-label products and merchandise from over 500 vendors. Founded in 1990 and based in Bolingbrook, Illinois, Ulta also provides various salon services, enhancing its market presence.
Financial Strength Breakdown
Ulta Beauty Inc's financial resilience is evident in its robust balance sheet and strategic debt management, with a Altman Z-Score of 6.38, indicating low risk of financial distress. The company's Debt-to-Revenue ratio stands at a healthy 0.17, underscoring its prudent financial management.
Profitability Rank Breakdown
Ulta Beauty Inc excels in profitability, with an impressive Operating Margin increase to 16.16% in 2023 from 12.44% in 2020. The company's Gross Margin has also consistently improved, reaching 39.62% in 2023. These metrics highlight Ulta's effective revenue conversion into profit, further supported by a strong Piotroski F-Score and a Predictability Rank of 4.5 stars.
Growth Rank Breakdown
Ulta Beauty Inc's commitment to growth is reflected in its Growth Rank of 10/10. The company's 3-Year Revenue Growth Rate of 27.6% outperforms 86.2% of peers in the Retail - Cyclical industry. This is complemented by a significant EBITDA growth, emphasizing Ulta's expanding operational capabilities.
Conclusion
Considering Ulta Beauty Inc's robust financial strength, exceptional profitability, and impressive growth metrics, the GF Score highlights the company's unparalleled position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores through the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
