Is Ulta Beauty Inc (ULTA) overvalued?
On Equity Rank's model estimate, ULTA trades 66% above its fair value. Ulta Beauty Inc (ULTA) last closed at $644.76; the multi-method model fair value is $388.41.
| Price | Model fair value | Price vs model |
|---|---|---|
| $644.76 | $388.41 | 66% above |
What the answer rests on
- 0 of 9 valuation methods put ULTA's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, ULTA's free cash flow would need to grow about 8.6% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -3.0% a year.
- ULTA trades at 23.1 times its last year's earnings, against a median of 14.7 for 36 profitable Specialty Retail companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 34% above to 96% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind ULTA's fair value · What prices assume · Other companies