Ulta Beauty is a commercial stock that you can buy
Last Beauty (NASDAQ: ULTA) highlights the dichotomy of mall retailers; whether you have it or not. When it comes to what the public wants, FQ1 results show that Ulta definitely has what consumers want. The company’s results were both above consensus and to change the game and this is also seen in the activity of the analyst. At least 6 of the analysts covering the shares have commented since the launch of the first quarter and all is well. Among the 6 are 6 target price increases and 1 rating upgrade to buy from Hold. The comments have the consensus rating of Marketbeat.com rising in firm buying territory from weak buying and rising price target in 12, 3 and 1 month comparisons.
Marketbeat.com’s $ 455 consensus target price is about 7% above recent price action and is rising. The consensus of the 6 most recent comments is closer to $ 481 and 13.25% of the rise in stock prices. From the results, guidance and activity of the analyst so far, we see that the consensus target tends to rise towards the current high price target of $ 500 and then increases. And the institutions represented by analysts? They have been net buyers for 12 of the last 13 quarters and own 90% of the business.
The strength of Ulta beauty is more than the depth of the skin
Ulta Beauty had a big quarter bordering on an absolute burst and the good news is in every part of the report. The company posted revenue of $ 2.34 billion, up 20.6% from last year. The force was driven by a better-than-expected number of clearing stores that left revenue more than 1,000 basis points above the consensus figure. In-store sales increased 18% year-over-year with a 10% increase in tickets and a 7.3% increase in average tickets.
The strength of the company’s revenue led to significant leverage and wider margins. Gross margin was extended by 120 basis points, operating margin by 290, to drive accelerated growth in the final result. GAAP earnings of $ 6.30 not only increased $ 2.20 from last year, but exceeded the consensus by $ 1.82 or about 4,000 basis points and there is more good news to come.
In terms of guidance, the company not only expects to see the revenue strength remain at the end of the year, but the margin remains favorable as well as the earnings strength. The new revenue targeting ranks at $ 9.35 billion at the low end compared to the consensus figure of $ 9.16 and widening the operating margin. This combination should generate a GAAP BPA of $ 19.20 to $ 20.10, which compares well with the $ 19.00 seed consensus.
Technical Perspectives: Ulta Beauty is on track to reach a new all-time high
Price action on Ulta Beauty rose in the first quarter and looks set to set a new all-time high. Price action is not only above a major resistance target, but the indicators are also bullish. Assuming the price action can exceed the current all-time high, we see that it moves up to the consensus price target of at least $ 455.