Ulta Salon (ULTA) is paradise for women. The stores provide hair cuts, color and styling, give nail service, and offer skin treatments & waxing. Additionally, Ulta Salons sell beauty products. High quality beauty products that you won’t find in drugstores.
ULTA has been on a roll since the stock market turned up in March 2009. I should have bought ULTA on 1/6/2010 when it was $19 but didn’t feel a salon was worth 27 times earnings. Now the stock is $94, and still looks as beautiful as ever.
One Year Chart
One thing I wish to point out is ULTA isn’t really overvalued at 37 times earnings (even though I put the P/E in red). I want to buy this stock at 30 times earnings, and am comfortable waiting (I’ve waited this long). With that in mind, I put the P/E in red.
Profit growth is still amazing. 46% growth last quarter on a 22% increase in sales. 22% isn’t a great number, which is one reason I feel ULTA is worth 30 times earnings.
Fair Value
ULTA is around $95 and would be a good buy at $77. Note in the one-year chart the stock touched $80 earlier this year. If this gets to around $80 again I may get in.
Sharek’s Take
Ulta Salon still looks great even after the run from $10 to almost $100. At this point the P/E is a little high. I’ll keep ULTA at the top of my radar and look to buy in the low $80s. Check the ten-year chart below, this stock is beautiful.
View the Earnings Table here.View the Ten Year Chart here.
