Ulta Beauty (ULTA) shares crashed on Friday after the largest U.S. cosmetics retailer came up short of profit estimates for its fiscal Q4 and issued muted guidance for the full year. The post-earnings dip pushed ULTA’s relative strength index (14-day) into the low-20s, signaling extremely oversold conditions that often precede a relief rally.
Following recent declines, Ulta Beauty stock is down more than 20% versus its year-to-date high.
Is It Worth Investing in Ulta Beauty Stock Today?
Much of ULTA’s bottom-line weakness in the fourth quarter was due to a 23% increase in SG&A expenses as the company continued to modernize its supply chain. Ulta Beauty is front-loading capital into automated distribution to lower long-term labor costs.
Plus, management is investing aggressively in virtual try-on tech and TikTok shop integrations as part of its broader Ulta Beauty Unleashed strategy.
Over time, these initiatives are expected to improve efficiency and drive margin expansion, which makes ULTA shares worth owning on the post-earnings dip today.
ULTA Shares Are Attractively Priced
Ulta Beauty shares are also attractive at the current, toned-down valuation because the company’s mass brands (NYX, L’Oreal, e.l.f.) position it well to weather economic softness in 2026.
Plus, Ulta Beauty Rewards currently has about 45 million active members who drive roughly 95% of overall sales — a loyalty moat that most rivals just can’t replicate.
It's also worth mentioning that ULTA has authorization to buy back about $1.8 billion worth of its stock this year, which makes it even more exciting as a long-term investment.
Despite recent declines, options traders remain bullish on Ulta Beauty as well. Contracts expiring in mid-June have the upper price set at roughly $644, indicating potential upside of nearly 20% from here.
Ulta Beauty Remains a Buy-Rated Stock
Wall Street analysts seem to share options traders optimism on ULTA stock, especially since it has a history of closing both March and April with notable gains.
According to Barchart, the consensus rating on Ulta Beauty Inc remains at “Moderate Buy,” with the mean target of about $712 indicating potential upside about 30% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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