e.l.f. Beauty (ELF) and Ulta Beauty (ULTA) Financial Review

e.l.f. Beauty (NYSE: ELF) and Ulta Beauty (NASDAQ:ULTA) are both consumer staples companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Earnings & Valuation

This table compares e.l.f. Beauty and Ulta Beauty’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
e.l.f. Beauty $249.18 million 4.62 $38.92 million $0.20 125.95
Ulta Beauty $5.10 billion 3.05 $924.07 million $7.12 35.26

Ulta Beauty has higher revenue and earnings than e.l.f. Beauty. Ulta Beauty is trading at a lower price-to-earnings ratio than e.l.f. Beauty, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares e.l.f. Beauty and Ulta Beauty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
e.l.f. Beauty 4.16% 10.86% 3.79%
Ulta Beauty 8.75% 28.91% 17.29%

Institutional and Insider Ownership

95.7% of e.l.f. Beauty shares are owned by institutional investors. Comparatively, 85.6% of Ulta Beauty shares are owned by institutional investors. 16.5% of e.l.f. Beauty shares are owned by insiders. Comparatively, 5.2% of Ulta Beauty shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for e.l.f. Beauty and Ulta Beauty, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
e.l.f. Beauty 0 4 7 0 2.64
Ulta Beauty 0 10 12 0 2.55

e.l.f. Beauty presently has a consensus target price of $30.70, suggesting a potential upside of 21.87%. Ulta Beauty has a consensus target price of $320.06, suggesting a potential upside of 27.49%. Given Ulta Beauty’s higher possible upside, analysts plainly believe Ulta Beauty is more favorable than e.l.f. Beauty.

Summary

Ulta Beauty beats e.l.f. Beauty on 8 of the 13 factors compared between the two stocks.

About e.l.f. Beauty

e.l.f. Beauty, Inc., formerly J.A. Cosmetics Holdings, Inc., is a cosmetic company. The Company conducts its business under the name e.l.f. Cosmetics, and offers products for eyes, lips and face to consumers through its retail customers, e.l.f. stores and e-commerce channels. The Company offers a range of products for eyes, such as eyeshadow, eyeliner, mascara and eyelashes, eyebrows, concealer and primer, brushes and tools, and sets and palettes. The Company offers lipstick, lip gloss, lipliner, and lip care and brushes. The Company launches its products on elfcosmetics.com, and distribution is generally only broadened to its retail customers after it receives consumer validation online. The Company sells its products in national and international retailers (with international primarily serviced by distributors) and direct-to-consumer channels. It sells its products in retail stores in the United States across mass, drug store, food and specialty retail channels.

About Ulta Beauty

Ulta Beauty, Inc. is a holding company for the Ulta Beauty group of companies. The Company is a beauty retailer. The Company offers cosmetics, fragrance, skin, hair care products and salon services. The Company offers approximately 20,000 products from over 500 beauty brands across all categories, including the Company’s own private label. The Company also offers a full-service salon in every store featuring hair, skin and brow services. The Company operates approximately 970 retail stores across over 48 states and the District of Columbia and also distributes its products through its Website, which includes a collection of tips, tutorials and social content. The Company offers makeup products, such as foundation, face powder, concealer, color correcting, face primer, blush, bronzer, contouring, highlighter, setting spray, shampoos, conditioners, hair styling products, hair styling tools and perfumes. The Company also offers makeup brushes and tools, and makeup bags and cases.

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