Long Trade Idea
Enter your long position between $502.13 (the intra-day low of its last bullish candlestick) and $515.83 (Friday’s intra-day high).
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Market Index Analysis
Ulta Beauty (NASDAQ:ULTA) is a member of the S&P 500 Index.
This index records all-time highs despite rising macroeconomic issues, expanding the AI bubble.
The Bull Bear Power Indicator for the S&P 500 Index is bullish with a negative divergence.
Market Sentiment Analysis
Equity futures are drifting higher, extending the AI-driven narrative that has pushed equity markets higher, while markets ignore concentration risks, for now. Oil prices moved higher but remain well off their 2026 peak. Friday’s May US NFP report is the next significant non-AI test for markets. Investors also await earnings from Broadcom, Ciena, Palo Alto Networks, CrowdStrike, Dollar General, Five Below, and Macy’s for AI and consumer sentiment data.
Ulta Beauty Fundamental Analysis
Ulta Beauty is a cosmetics retailer offering high-end brands and mass-market products. It sells makeup, fragrances, skincare, and haircare products, and each location has a beauty salon.
So, why am I bullish on ULTA ahead of its earnings release?
The recent 34%+ sell-off lowered valuations to attractive levels, but my bullishness stems from its strategic price improvements. Its products currently have an average price that is only 0.5% higher than its major competitors, compared to an 11.6% premium at the end of 2025. Therefore, I believe it will beat on the top and bottom line, from where I see more upside. I am also bullish on its Google partnership to offer Gemini-enabled shopping experiences, and its new shopping assistant, Ulta AI.
Metric | Value | Verdict |
P/E Ratio | 19.84 | Bullish |
P/B Ratio | 7.97 | Bearish |
PEG Ratio | 1.69 | Bullish |
Current Ratio | 1.41 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earnings (P/E) ratio of 19.84 makes ULTA an inexpensive stock. By comparison, the P/E ratio for the S&P 500 Index is 32.67.
The average analyst price target for ULTA is $678.88. This suggests excellent upside potential with decreasing downside risks.
Ulta Beauty Technical Analysis
Today’s ULTA Signal
The ULTA D1 chart shows price action breaking out above its horizontal support zone.
It also shows price action between its descending 0.0% and 31.2% Fibonacci Retracement Fan levels.
The Bull Bear Power Indicator is bullish with an ascending trendline.
The average bearish trading volumes are higher than the average bullish trading volumes, hinting at potentially more short-term volatility.
ULTA advanced less than the S&P 500 Index, a bearish confirmation, but bullish catalysts are rising.
My ULTA Long Stock Trade
ULTA Entry Level: Between $502.13 and $515.83
ULTA Take Profit: Between $615.00 and $624.95
ULTA Stop Loss: Between $452.05 and $462.55
Risk/Reward Ratio: 2.25
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