...

Ulta Beauty, Inc. (ULTA) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

Popular:

Ulta Beauty, Inc. (ULTA)

View Full Profile →

Intrinsic Value (DCF)

Current$665.12
→
Intrinsic$480.89
-28%
$319.85$480.89$786.80
Market implies 24% growth for 5 years
ULTA trades at a premium to our conservative estimate — investors expect above-average performance.
At $665, the market prices in continued strong cash flow growth (24%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $320 → Bull $787. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →12%14%16%18%
8%$586$639$695$755
10%$406$442$481$522
12%$307$334$362$393
14%$243$265$287$311

Bull Case

  • Bull case ($787) offers 18% upside at 19% growth, 9% discount

Bear Case

  • Bear case ($320) implies 52% downside at 13% growth, 12% discount
  • Price reflects 24% growth expectations vs 16% historical — high bar to clear
  • Trading 28% above base case — execution must exceed assumptions to justify
Loading charts...

5-Year Free Cash Flow Projection

Year 1$1.12B
Year 2$1.29B
Year 3$1.50B
Year 4$1.74B
Year 5$2.01B
Terminal$29.59B

📐 Model Inputs

Growth Rate15.8%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$964.15MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Related Analysis

Full Stock ProfileCompare ULTA vs AAPLStock Screener

Frequently Asked Questions

Is ULTA stock undervalued or overvalued?
🔴 OVERVALUED

ULTA trades at $665.12 vs. our DCF-derived intrinsic value of $480.89, implying -26% downside. Using a 10.0% WACC and 15.8% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($714.19) suggests limited upside.

What is ULTA's intrinsic value?

Using a 5-year DCF model: Base FCF of $964M, projected at 15.8% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $1.22B net debt and dividing by 0.05B shares: Bear $317.60 | Base $480.89 | Bull $714.19. Current price $665.12 implies -26% to base case.

How is ULTA's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 15.8% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($24.02B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 24.9x.