Ulta Beauty (NASDAQ:ULTA – Get Free Report) and Five Below (NASDAQ:FIVE – Get Free Report) are both large-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.
Profitability
This table compares Ulta Beauty and Five Below’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ulta Beauty | 9.34% | 45.40% | 17.37% |
| Five Below | 11.65% | 22.13% | 9.86% |
Analyst Recommendations
This is a summary of recent recommendations for Ulta Beauty and Five Below, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ulta Beauty | 0 | 8 | 23 | 1 | 2.78 |
| Five Below | 0 | 13 | 19 | 0 | 2.59 |
Ulta Beauty presently has a consensus price target of $631.30, indicating a potential downside of 4.45%. Five Below has a consensus price target of $300.20, indicating a potential upside of 18.70%. Given Five Below’s higher probable upside, analysts plainly believe Five Below is more favorable than Ulta Beauty.
Institutional and Insider Ownership
90.4% of Ulta Beauty shares are held by institutional investors. 0.2% of Ulta Beauty shares are held by insiders. Comparatively, 1.0% of Five Below shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Volatility & Risk
Ulta Beauty has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Five Below has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.
Earnings and Valuation
This table compares Ulta Beauty and Five Below”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ulta Beauty | $12.39 billion | 2.28 | $1.15 billion | $27.44 | 24.08 |
| Five Below | $4.76 billion | 2.92 | $358.64 million | $11.14 | 22.70 |
Ulta Beauty has higher revenue and earnings than Five Below. Five Below is trading at a lower price-to-earnings ratio than Ulta Beauty, indicating that it is currently the more affordable of the two stocks.
Summary
Ulta Beauty beats Five Below on 10 of the 15 factors compared between the two stocks.
About Ulta Beauty
Ulta Beauty, Inc. operates as a specialty beauty retailer in the United States. The company offers branded and private label beauty products, including cosmetics, fragrance, haircare, skincare, bath and body products, professional hair products, and salon styling tools through its Ulta Beauty stores, shop-in-shops, Ulta.com website, and its mobile applications. It also offers beauty services, including hair, makeup, brow, and skin services at its stores. The company was formerly known as ULTA Salon, Cosmetics & Fragrance, Inc. and changed its name to Ulta Beauty, Inc. in January 2017. Ulta Beauty, Inc. was incorporated in 1990 and is based in Bolingbrook, Illinois.
About Five Below
Five Below, Inc. operates as a specialty value retailer in the United States. The company offers range of accessories, which includes novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, as well as nail polish, lip gloss, fragrance, and branded cosmetics; and personalized living space products, such as lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, accent furniture, and related items, as well as provides storage options. It provides assortment of sports balls, team sports merchandise, and fitness accessories comprising hand weights, jump ropes, and gym balls; various games, such as board games, puzzles, collectibles, and toys, including remote control; and summer season sports, which includes pool, beach, and outdoor toys, as well as games and accessories. In addition, the company offers accessories for cell phones, tablets, audio, and computers, as well as cases, chargers, headphones, and other related items; and media products including books, video games, and DVDs. It also provides assortment of craft activity kits, and arts and crafts supplies, such as crayons, markers, and stickers; and school products comprising backpacks, fashion notebooks and journals, novelty pens and pencils, and locker accessories. Further, the company offers party products, which includes party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food products, as well as sells chilled drinks through coolers; and provides seasonally specific items used to celebrate and decorate for events. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was incorporated in 2002 and is headquartered in Philadelphia, Pennsylvania.
Receive News & Ratings for Ulta Beauty Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Ulta Beauty and related companies with MarketBeat.com's FREE daily email newsletter.
