If you invested $5,000 in Ulta Beauty Stock 5 years ago, here’s how much you’d have today
Future returns remain the primary concern of investors. However, looking at past stock returns can also provide wisdom. This is because it can help you see what the company did and did not achieve and how the share price reacted. It is also important to compare the return with the appropriate measure.
Turning to the well-known retail name, how rich it is Ulta beauty (NASDAQ: ULTA) created for shareholders in the last five years?
Five years ago, Ulta stock was trading at about $267 a share, and on Jan. 8, it closed at more than $415. This means an increase in value of 57.6%. Your $5,000 investment would grow to $7,878. Ulta Beauty stock doesn’t pay dividends, so that’s not a factor in returns.
That sounds impressive. But how would you be if you invested passively in index like S&P 500? The index has returned 95.5% over that time, including dividends. Therefore, your $5,000 investment would grow to $9,776.
Shares of Ulta Beauty have fallen over the past year. It has been growing fast, but sales have been slow lately. People cut back on spending because they had to pay more for basic things like food and rent.
Fiscal third-quarter same-store sales (comps) rose just 0.6% in the period ended Nov. 2, 2024. Most of the comps’ gain came from increased foot traffic, indicating shoppers are drawn to Ulta’s stores and website.
Ulta offers products like cosmetics, skin care and fragrances at different prices. That should help the company until inflationary pressures subside and consumers looking for lower-priced items feel more comfortable spending money.
The stock trades at a price-to-earnings (P/E) ratio of 17, compared with around 20 a year ago. That’s much lower than the S&P 500’s P/E multiple of 30. With stocks falling on cyclical concerns, five years from now, long-term investors could look back and be satisfied with the returns and wealth created.
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