Ulta Beauty (ULTA) is a Great Momentum Stock: Should You Buy?

Zacks Investment Research highlights Ulta Beauty (ULTA) as a compelling momentum stock, citing its Zacks Rank of #2 (Buy) and Momentum Style Score of B. ULTA's shares have significantly outperformed both its industry and the S&P 500 over various timeframes, including a 15.83% increase in the past week and a 41.43% gain over the past quarter; furthermore, earnings estimates have been revised upwards, increasing the full-year consensus from $23.05 to $23.54 in the last two months.

Analysis

Ulta Beauty (ULTA) exhibits strong momentum characteristics, underpinned by significant outperformance and positive earnings estimate revisions, according to Zacks Investment Research. The stock holds a Zacks Rank of #2 (Buy) and a Momentum Style Score of B. Notably, ULTA's shares have surged 15.83% over the past week, far outpacing the Zacks Retail - Miscellaneous industry's 1.1% gain. This outperformance extends to longer horizons, with an 18.59% monthly price increase compared to the industry's 5.02%, a 41.43% rise over the past quarter versus the S&P 500's 3.59% move, and a 20.27% gain in the last year against the S&P 500's 14.21%. The company's average 20-day trading volume stands at 954,132 shares. Reinforcing this positive momentum, ULTA's full-year consensus earnings estimate has increased from $23.05 to $23.54 in the past 60 days, driven by 11 upward revisions against only one downward revision. For the next fiscal year, there have been 6 upward estimate revisions compared to 3 downward revisions. This combination of robust price appreciation and improving earnings outlook positions ULTA as a noteworthy stock for momentum-focused investors.

Key Decisions for Investors

• Given Ulta Beauty's strong price momentum and positive earnings estimate revisions, investors might consider it for portfolios targeting near-term growth, aligning with its Zacks #2 (Buy) rating and B Momentum Style Score.
• The stock's significant outperformance relative to both its industry and the S&P 500 across multiple timeframes suggests a continuation of this trend could be anticipated by momentum-driven strategies.
• Monitor upcoming earnings reports and further estimate revisions closely, as these will be key indicators for sustaining the current momentum and validating the bullish outlook.