Ulta Beauty (ULTA)
Retail especializado de belleza
Ulta Beauty is the largest specialty beauty retailer in the U.S., with a loyalty program of more than 46 million members (~95% of sales) that sustains omnichannel spending and the relationship with partner brands, in a market the 10-K itself describes as having few barriers to entry. It trades at 20× on adjusted earnings, with an estimated base-case return of +11% over 5 years, It trades at a real discount to value, though short of the required margin of safety..
- Price
- $529.82
- Intrinsic value (5y, base)
- $884
- Total annual return (5y)
- 10.8%
- Status (nominal)
- Undervalued
- Margin of safety
- +25%
The essentials
- The largest specialty beauty retailer in the U.S., with a loyalty program of more than 46 million members generating ~95% of sales.
- Fiscal 2026 guidance raised in the June 2, 2026 release: diluted earnings per share of US$28.36-US$28.80 (from US$28.05-US$28.55) and operating income growth of +6.5% to +9%.
- Capital return 100% via buybacks since 2013 (no dividend): US$898.5 million repurchased in fiscal 2025 and US$555.0 million in the first quarter of fiscal 2026.
- Return on capital well above the 10% bar, with a minimal-debt balance sheet (only short-term debt).
Intrinsic value — two valuation methods
By both methods, the value today (DCF $860 · Multiples $709) exceeds the market price ($530).
Pillars of the analysis
The verdict — today vs 5 years
Today — fairly valued: at $530 trades ~25.3% below its value discounted to today (~$709); the discount is positive but does not reach the margin of safety we require (≥38%).
At 5 years — Infravalorado: the target price ($884) plus dividends yield above the required average return (10%) — the business compounds.
The bridge: the return at 5 years exceeds the risk-free rate (4.5%) — but the discount does not reach the required margin of safety (≥38%). To require a 15% annual return, it would need to be bought at ~$440.
Thesis
The business
The largest specialty beauty retailer in the U.S., with a loyalty program that concentrates ~95% of sales and a return on capital well above the 10% bar. The moat is narrow — the 10-K itself acknowledges few barriers to entry — but real in omnichannel purchase behavior and access to exclusive brand launches.
The valuation
Valued by multiples, as a single business (specialty beauty retail) on normalized adjusted earnings, at a multiple of 20× on today's earnings. The base value over 5 years is $884/share, with an estimated annual return of +11% (appreciation plus buyback effect via fewer shares, no dividend).
The margin of safety
At the market price, the base-case return implies It trades at a real discount to value, though short of the required margin of safety.. The adverse scenario is anchored in the end of the Target partnership and margin compression from competition; the favorable scenario, in UB Marketplace and UB Media maturing into high-margin lines.
What to watch
The central disconfirmer is whether same-store sales stall again as in fiscal 2024 (+0.7%) once the Space NK acquisition effect fades, combined with the actual impact of the end of the Target partnership in August 2026 on traffic and new-customer acquisition.
Educational / informational. Does not constitute investment advice.