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Ulta Beauty Inc (ULTA) Trade Card™

Ulta Beauty Inc (ULTA)
174.4 -14.43 (-7.64%)
Sector: Retailing
Published by Capital Market Laboratories on 2020-03-28

What does this rating mean?
STOCK RETURNS
3Mo: -31.1%   |   6Mo: -28.6%  |   12Mo: -49.5%

TECHNICAL RATING
10DMA: $230.2  |  50DMA: $249.4  |  200DMA: $272.9
What does this rating mean?

Fundamentals     

➜ ULTA generates $1.1387 in revenue for every $1 in expense, which is above the sector average of $1.04.

ULTA Salon (ULTA) is one of the single most compelling retail stocks in the United States. The firm aims much of its growth efforts at Millenials and continues to execute both in the on-line space and brick-and-mortar.

The company continues to benefit from more targeted marketing through its loyalty and CRM program. Further, ULTA is one of very few retailers that understands how to use social media to further its brand, its reach, and ultimately, its growth. In a Mother’s Day social media program which engaged its users to participate, the original campaign video was viewed 1.4 million times on social media channels and garnered more than 100 million media impressions. That's simply a company doing it right.

ULTA's revenue (TTM) has risen for more than five consecutive quarters. One year ago the firm reported $6.72 billion in revenue. For the most recent year it reported $7.40 billion (a 10.1% one-year rise). Two-years ago the firm reported annual revenue of $5.88 billion (up 25.7%).

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Technicals   |   Support: 161.54   |   Resistance: 268.84   

Swing Death Cross Alert: The short-term 10 day MA is now below the 50 day MA.

ULTA's -7.64% drop today has a material impact on its technical outlook.

ULTA has a one bull (lowest rated) technical rating because it's trading below the 10-day (short-term), 50-day (medium-term) and 200-day (long-term) moving averages.


Earnings Estimates
Earnings Date
2018-03-08
EPS
$2.77
Revenue (Mean)
$
Revenue (Median)
$
Last Quarter (Actual)
$2.31 billion


Fundamentals Rating Summary


Metric Current 1yr Ago 2yr Ago Direction
Revenue (TTM US$ Millions)Trending Higher 7,398 6,717 5,885 Trending Higher

Operating Margin (QTR)Falling 1.14 1.15 1.15 Falling

Net Income (TTM US$ Millions)Rising 706 659 555 Rising

Cash from Operations (TTM US$ Millions)Rising 1,101 956 779 Rising

Capital Expenditures (TTM US$ Millions)
Falling
299 319 441
Falling




Stock Returns and Chart


ULTA is down -31.1% over the last three months and down -28.6% over the last six months. The stock has returned -49.5% over the last year.

Before we dig into the fundamental trends that drive the rating, let's look at a two-year stock chart with regression channel and 10-day momentum (on the bottom).

Note: You can change time horizons by clicking the or buttons near the bottom of the chart. You can examine a one minute day trading chart by clicking the at the top left corner of the chart.

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Now let's examine the visualizations of the critical financial measures.


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METRIC CURRENT 1YR AGO 2YR AGO DIRECTION
Revenue (TTM US$ Millions) 7,3986,7175,885Trending Higher

Revenue (TTM) has increased for at least five consecutive quarters which triggers a "trend." In the time series chart below, we can see the consecutive quarter growth.

Revenue over the trailing twelve months (TTM) for ULTA is rising. For the most recent (annual) period the company reported $7.40 billion from $6.72 billion a year ago, or a 10.1% change. Two years ago revenue (TTM) was $5.88 billion which is a change of $1.51 billion a (25.7% move).

What do all these numbers mean?
ULTA's fundamental rating benefited these results:
1. The one-year change was positive (but no extra points were given for a large percentage increase).
2. The two-year change was positive.
Finally, the five+ consecutive quarters of an upward trend in revenue benefited the fundamental (star) rating.

Let's look at Revenue (TTM US$ Millions) in the chart below.


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METRIC CURRENT 1YR AGO 2YR AGO DIRECTION
Operating Revenues/Operating Expense 1.141.151.15Falling

Operating Revenues/Operating Expense
This ratio (which simply represents how much revenue is generated per one dollar of expense) must be at a minimum above 1.0 in order for a company to turn an operating profit. For the latest quarter ULTA showed a ratio of 1.14.

What do all these numbers mean?
A year ago Operating Revenues/Operating Expense was 1.15. In the last year we can see operating margins are decreasing but are greater than 1.0 for the most recent period.

ULTA's fundamental rating was affected from the operating margin numbers in two ways:
1. The current value is above 1.0 (the firm generates an operating profit).
2. The one-year change was negative (lowers the rating a little bit).

Let's look at Operating Revenues/Operating Expense in the chart below with the total assets in the orange line.


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METRIC CURRENT 1YR AGO 2YR AGO DIRECTION
Net Income (TTM US$ Millions) 706659555Rising

Net Income (after tax profit) over the trailing twelve months (TTM) for ULTA is rising. For the most recent trailing-twelve-months (TTM) the company reported net income of $706 (million). That's an increase in the most recent year from $659 (million) or a 7.20% change.

In our next chart we plot Net Income (TTM US$ Millions) in the blue bars and the quarterly results in the gold line. Note the rising bars from a year ago (four quarters ago).


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METRIC CURRENT 1YR AGO 2YR AGO DIRECTION
Cash from Operations (TTM US$ Millions) 1,101956779Rising

Cash from Operations (TTM US$ Millions) is a critical determinant of stock price since market cap is the present value of all future free cash flows. For ULTA the metric is falling (it was $956 million last year). For the most recent trailing-twelve-months the company reported Cash from Operations (TTM US$ Millions) of $1,101 million. That's a rise in the most recent year from $956 million (a 15.18% increase.)

This measure of cash is up $322 million from 779 two-years ago.

For our next chart we plot Cash from Operations (TTM US$ Millions) in the blue bars through time. Note the falling bars from a year ago (four quarters ago).



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METRIC CURRENT 1YR AGO 2YR AGO DIRECTION
Capital Expenditures (TTM US$ Millions) 299319441
Falling

Capital Expenditures (TTM US$ Millions) in the most recent quarter for ULTA was $299 million. CapEx is falling (-6.53%) from last year's value of $319 million. Further, we can see that CapEx today relative to two-years ago is decreasing (-32.26%) from last year's value of $441 million.

In our final time series chart we plot Capital Expenditures (TTM US$ Millions) in the blue bars. Note the falling bars from one-year ago.


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