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 didn’t do, and how the stock price reacted. It is also important to compare the return with a reasonable one Benchmark.
Turning to a familiar retail name, what a fortune Ulta beauty (NASDAQ: ULTA ) Has made for shareholders in the last five years?
Five years ago, Ulta’s stock traded at around $267 a share and closed at more than $415 on January 8. which has increased by 57.6%. Your $5,000 investment will grow to $7,878. Ulta Beauty’s stock doesn’t pay dividends, so it doesn’t factor into returns.
That sounds impressive. But how would you have done if you had invested Passively In the index like S&P 500? The index returned 95.5% during this period, including dividends. So, your $5,000 investment will grow to $9,776.
Ulta Beauty’s stock has declined over the past year. It was a fast producer, but sales have been sluggish lately. People have pulled back on spending, as they have to pay more for basics like food and rent.
Its fiscal third-quarter same-store sales (comps) rose just 0.6% in the period ending Nov. 2, 2024. Most of the comp gains came from increased traffic, indicating that shoppers are drawn to Ulta’s stores and website.
Ulta offers products such as cosmetics, skincare, and fragrances at various price points. This should help the company until inflationary pressures ease and consumers seeking lower-priced goods feel more comfortable spending money.
The stock trades at a price-to-earnings (P/E) ratio of 17, compared with about 20 a year ago. That’s well below the S&P 500’s P/E multiple of 30. With stocks going down due to cyclical concerns, in five years long-term investors can look back and be happy with the returns and wealth created.
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