Ulta Beauty (NASDAQ:ULTA – Get Free Report) and Zalando (OTCMKTS:ZLNDY – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.
Profitability
This table compares Ulta Beauty and Zalando’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% |
| Zalando | 0.70% | 3.46% | 1.06% |
Analyst Ratings
This is a breakdown of current ratings and price targets for Ulta Beauty and Zalando, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ulta Beauty | 0 | 8 | 24 | 0 | 2.75 |
| Zalando | 0 | 1 | 1 | 2 | 3.25 |
Ulta Beauty presently has a consensus price target of $627.83, suggesting a potential upside of 5.88%. Given Ulta Beauty’s higher possible upside, analysts clearly believe Ulta Beauty is more favorable than Zalando.
Insider and Institutional Ownership
90.4% of Ulta Beauty shares are owned by institutional investors. 0.2% of Ulta Beauty shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Risk & Volatility
Ulta Beauty has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500. Comparatively, Zalando has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500.
Valuation and Earnings
This table compares Ulta Beauty and Zalando”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ulta Beauty | $12.39 billion | 2.05 | $1.15 billion | $27.44 | 21.61 |
| Zalando | $13.97 billion | 0.49 | $243.36 million | $0.22 | 63.73 |
Ulta Beauty has higher earnings, but lower revenue than Zalando. Ulta Beauty is trading at a lower price-to-earnings ratio than Zalando, indicating that it is currently the more affordable of the two stocks.
Summary
Ulta Beauty beats Zalando 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 Zalando
Zalando SE operates an online platform for fashion and lifestyle products. The company operates through Fashion Store and Offprice segments. It provides shoes, apparel, accessories, and beauty products with free delivery and returns, as well as various payment options. The company also sells its products through Lounge by Zalando; and brick-and-mortar outlet stores. It operates in Germany, Austria, Switzerland, Belgium, Croatia, the Czech Republic, Denmark, Estonia, Finland, Hungary, France, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. The company was founded in 2008 and is headquartered in Berlin, Germany.
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