Ulta Salon Cosmetics & Fragrances Inc. (ULTA): Today's Featured Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

Ulta Salon Cosmetics & Fragrances ( ULTA) pushed the Services sector lower today making it today's featured Services laggard. The sector as a whole closed the day up 0.6%. By the end of trading, Ulta Salon Cosmetics & Fragrances fell $1.02 (-1.1%) to $89.74 on light volume. Throughout the day, 644,547 shares of Ulta Salon Cosmetics & Fragrances exchanged hands as compared to its average daily volume of 1,456,100 shares. The stock ranged in price between $88.20-$91.24 after having opened the day at $91.24 as compared to the previous trading day's close of $90.76. Other companies within the Services sector that declined today were: National Research Corporation ( NRCIB), down 20.9%, Pandora Media ( P), down 10.6%, PokerTek ( PTEK), down 9.6% and Point.360 ( PTSX), down 9.1%.
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Ulta Salon, Cosmetics & Fragrance, Inc. operates specialty retail stores in the United States. Its stores offer cosmetics, fragrance, haircare, and skincare products, as well as related accessories and services. Ulta Salon Cosmetics & Fragrances has a market cap of $5.8 billion and is part of the diversified services industry. The company has a P/E ratio of 34.1, above the S&P 500 P/E ratio of 17.7. Shares are down 7.6% year to date as of the close of trading on Friday. Currently there are 7 analysts that rate Ulta Salon Cosmetics & Fragrances a buy, no analysts rate it a sell, and 3 rate it a hold.

TheStreet Ratings rates Ulta Salon Cosmetics & Fragrances as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

On the positive front, Orchard Supply Hardware ( OSH), down 57.4%, Heidrick & Struggles International ( HSII), down 19.7%, Dolan ( DM), down 15.4% and Rada Electronics Industries ( RADA), down 14.8% , were all gainers within the services sector with Costco Wholesale Corporation ( COST) being today's featured services sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the services sector could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the services sector could consider ProShares Ultra Short Consumer Sers ( SCC).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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