Intrinsic Value (DCF)
Current$684.79
→
Intrinsic$480.89
-30%
$319.85$480.89$786.80
Market implies 25% growth for 5 years
ULTA trades at a premium to our conservative estimate — investors expect above-average performance.
At $685, the market prices in continued strong cash flow growth (25%) — 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 15% upside at 19% growth, 9% discount
Bear Case
- Bear case ($320) implies 53% downside at 13% growth, 12% discount
- Price reflects 25% growth expectations vs 16% historical — high bar to clear
- Trading 30% above base case — execution must exceed assumptions to justify
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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%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.