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In the latest trading session, Ulta Beauty (ULTA) closed at $406.35, marking a +0.16% move from the previous day. This move lagged the S&P 500’s daily gain of 0.34%.

Prior to today’s trading, shares of the beauty products retailer had gained 7.04% over the past month. This has outpaced the Retail-Wholesale sector’s loss of 1.38% and the S&P 500’s loss of 0.12% in that time.

ULTA will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.46, up 50% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.87 billion, up 20.61% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $15.14 per share and revenue of $8.34 billion, which would represent changes of +224.89% and +35.6%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ULTA. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.63% higher. ULTA is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note ULTA’s current valuation metrics, including its Forward P/E ratio of 26.81. For comparison, its industry has an average Forward P/E of 13.29, which means ULTA is trading at a premium to the group.

Investors should also note that ULTA has a PEG ratio of 2.06 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. Retail – Miscellaneous stocks are, on average, holding a PEG ratio of 1 based on yesterday’s closing prices.

The Retail – Miscellaneous industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 85, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ULTA in the coming trading sessions, be sure to utilize Zacks.com.

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