Value
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.3 |
| P/S | 9.3 |
| EV/EBITDA | 5.0 |
| Fwd P/E | 8.2 |
| PEG | 4.8 |
| Analyst target | 9.0 |
- ▸Forward P/E: 14.4x
- ▸PEG: 1.70
- ▸Attractively valued
ULTA · Why this verdict
Why Ulta Beauty (ULTA) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The top ten brand partners represent 51% of merchandise purchases, meaning a disruption in relations with any major brand partner could meaningfully reduce product availability, margin, or competitive positioning in the beauty retail market. Bear case | No major brand partner relationship disruption reduces Ulta's category leadership or margins by more than 5% over the next 12 months | →Stable |
| CounterLarge brand partners are incentivized to maintain Ulta as a distribution channel, and Ulta's private label and emerging brand curation strategy reduces reliance on any single major partner over time | ||
Analysts see 33% upside to a price target of $564.52 from the current $471.65, and the company has beaten earnings in 3 of the last 4 quarters with an average surprise of 9.2%, providing a fundamental base for eventual price recovery if the technical pattern resolves. Targets | Price reaches at least $550, more than 16% above the current $471.65, within 12 months as the death cross resolves and analysts maintain targets | →Stable |
| CounterNegative momentum scoring of 2.6 — well below the 4.5 threshold — suggests the market is aggressively repricing the stock, and analyst targets may lag a deteriorating fundamental story | ||
Ulta Beauty generates 47% return on equity — among the highest in specialty retail — and a Piotroski score of 7 out of 9, indicating a high-quality underlying business, though the quality advantage is currently being overshadowed by confirmed downward price momentum. Quality breakdown | ROE stays above 40% and the business quality score remains above 6.5 for the next 4 reported periods, preserving the quality foundation as the technical situation resolves | →Stable |
| CounterSpecialty retail faces structural headwinds from e-commerce competition, and the supplier concentration with the top ten brands representing 51% of merchandise creates a negotiating constraint that can compress margins | ||
Ulta's chart shows a death cross with the stock below all major moving averages and RSI at 33 approaching oversold territory — the data classifies this as a falling-knife setup, which is a hard technical block preventing a favorable entry. Setup type | The death cross resolves and price crosses back above the 200-day moving average within 9 months, removing the falling-knife classification | →Stable |
| CounterRSI at 33 approaching oversold territory combined with technical support scores of 8.1 out of 10 suggests the stock is near a potential bounce level where buyers historically stepped in | ||
The top ten brand partners represent 51% of merchandise purchases, meaning a disruption in relations with any major brand partner could meaningfully reduce product availability, margin, or competitive positioning in the beauty retail market.
→StableBear case
- Expectation
- No major brand partner relationship disruption reduces Ulta's category leadership or margins by more than 5% over the next 12 months
CounterLarge brand partners are incentivized to maintain Ulta as a distribution channel, and Ulta's private label and emerging brand curation strategy reduces reliance on any single major partner over time
Analysts see 33% upside to a price target of $564.52 from the current $471.65, and the company has beaten earnings in 3 of the last 4 quarters with an average surprise of 9.2%, providing a fundamental base for eventual price recovery if the technical pattern resolves.
→StableTargets
- Expectation
- Price reaches at least $550, more than 16% above the current $471.65, within 12 months as the death cross resolves and analysts maintain targets
CounterNegative momentum scoring of 2.6 — well below the 4.5 threshold — suggests the market is aggressively repricing the stock, and analyst targets may lag a deteriorating fundamental story
Ulta Beauty generates 47% return on equity — among the highest in specialty retail — and a Piotroski score of 7 out of 9, indicating a high-quality underlying business, though the quality advantage is currently being overshadowed by confirmed downward price momentum.
→StableQuality breakdown
- Expectation
- ROE stays above 40% and the business quality score remains above 6.5 for the next 4 reported periods, preserving the quality foundation as the technical situation resolves
CounterSpecialty retail faces structural headwinds from e-commerce competition, and the supplier concentration with the top ten brands representing 51% of merchandise creates a negotiating constraint that can compress margins
Ulta's chart shows a death cross with the stock below all major moving averages and RSI at 33 approaching oversold territory — the data classifies this as a falling-knife setup, which is a hard technical block preventing a favorable entry.
→StableSetup type
- Expectation
- The death cross resolves and price crosses back above the 200-day moving average within 9 months, removing the falling-knife classification
CounterRSI at 33 approaching oversold territory combined with technical support scores of 8.1 out of 10 suggests the stock is near a potential bounce level where buyers historically stepped in
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ulta Beauty trades at a forward P/E of 14.8x with 47% ROE and has beaten earnings in 3 of the last 4 quarters, but is in a confirmed falling-knife technical pattern below all moving averages with a death cross in place, and its supplier concentration across the top ten brand partners creates a structural vulnerability.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 4.6 |
| Op margin | 5.7 |
| Net margin | 4.7 |
| Current ratio | 4.9 |
| FCF quality | 6.1 |
| Moat | 6.8 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 47%
- ▸Strong Piotroski F-Score: 7/9
Growth
5.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.3 |
| EPS growth | 5.1 |
Momentum
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 2.3 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -1.0%/30d — confirmed downtrend
Sentiment
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.4 |
| Analyst rating | 7.5 |
| Price target | 9.1 |
- ▸Analyst upside: 39%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $426,006 (0.002% of mkt cap)
Peer rank
5.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.2 |
| quality rank | 7.5 |
| growth rank | 6.7 |
Technical
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.8 |
| support resistance | 8.8 |
| 52w position | 2.6 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 8.5 |
| volatility | 4.1 |
| put call | 8.2 |
| implied vol | 6.2 |
| beta | 7.8 |
| debt equity | 5.6 |
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 7.1 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (8)
- MOMENTUM:5.4>=4.5
- ASYMMETRY:3.7>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.70
- EARNINGS_PROXIMITY:58d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- MOMENTUM:5.4<5.5 (soft — BUY_NOW allowed but watch)
- DEATH_CROSS:momentum=5.4>=5.0 recovering
Reward-to-Risk
3.74
Upside
+25.2%
Downside
6.7%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.4>=4.5. Top dim: Sentiment at 7.6; weakest: Insider at 5.0. No conviction either direction.
The strongest dimensions are Sentiment at 7.6, Value at 7.3, and Risk (lower is worse) at 6.8; the weakest are Insider at 5.0, Growth at 5.2, and Momentum at 5.4. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 3.74 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Roe Quality In Downtrend
Trip ifROE falls below 30% or operating margin drops below 8% for 2 consecutive quarters
- P2Falling Knife Death Cross Setup
Trip ifPrice drops below $445, more than 5% below current $471.65, deepening the falling-knife pattern
- P3Supplier Concentration Top Ten Brands
Trip ifA major brand partner representing more than 5% of purchases terminates or significantly restricts the Ulta relationship
- P4Analyst Upside With Earnings Beat Base
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters, ending the earnings beat pattern