Should you buy Ulta Beauty stock? (March 2024)

Published first at https://www.3minutebreakdowns.com Ulta Beauty stock analysis. Ticker: $ULTA Ulta Beauty just reported earnings and the stock dropped 5% taking the market cap to 26 billion dollars. With 767 million of cash on the balance sheet and no debt the enterprise value comes to 25.4 billion. Despite the drop in share price this looks like a decent quarter from Ulta and another solid year. Total revenue increased 9.8% to $11.2 billion with same store sales up 5.7%. Net income increased 12% to 1.29 billion and the company generated just over a billion dollars of free cash flow. That free cash flow is being invested back into new stores with any leftover cash being returned to shareholders. The number of shares outstanding has now declined by 25% over the last 10 years and management just announced another $2 billion of buybacks. If there is an issue with these results it’s company guidance. Ulta thinks that revenue will grow only 5% next year and earnings less than 3%. And that’s despite plans to open 60-65 new stores. The fact that Ulta is doubling the number of new stores this year and only seeing modest growth suggests pressure on margins and weak demand. However, it’s worth noting that Ulta is still dealing with difficult comparisons since the pandemic. And those 60 new stores aren’t going to be built straight away. Management announced plans to expand into Mexico next year so all in all the company could be setting up for a much bigger 2025. #stockstobuy #investing #stocks #3mb