December, 2018

ULTA Earnings: Looking forward instead of back

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ULTA is historically one of LikeFolio’s highest performing companies.  Take a look at this from the Likefolio Research Dashboard:

ULTA’s historical performance in LikeFolio Systems has been strong.

Obviously, there was a lot of anticipation around this name as we got this week’s Sunday Earnings Sheet.  Here’s a look at how ULTA’s purchase intent mentions have performed over the last several years:


ULTA Purchase Intent Mentions vs stock price

Two takeaways from this chart:  First of all, our data has been pretty well correlated to stock price (as evidenced in its system performance numbers above).  Most importantly, there isn’t a divergence opportunity here.

In other words, we see no clear, compelling reason in our data to believe ULTA will have a earnings report that is significantly different than Wall Street’s expectations (no alpha in this report.)

 Looking ahead…

Just because there isn’t a clear signal for the Q3 earnings report doesn’t mean our research should stop.  In fact, if we look a little deeper into ULTA’s social data in the research dashboard, we can pretty easily spot an interesting development in the current quarter:


ULTA’s PI mentions are spiking huge in the holiday quarter

That bar on the far right is the current pace for purchase intent mentions for this current quarter — the ever important holiday sales quarter.

And it’s booming.  Much of that increase can be attributed to the clear successes of Ulta’s exclusive partnerships with Kylie Jenner and James Charles.

Trader Thoughts on ULTA

Even though we don’t have any alpha on the Q3 results report this time, we are still armed with some interesting information.

  1.  We think ULTA is unlikely to miss or beat its Q3 by a substantial margin… this makes the likelihood of a smaller than expected stock move tomorrow morning.  Options traders know where we’re going with this.
  2. The purchase intent number for Q4 so far are very impressive.  This makes it unlikely that ULTA will reduce guidance, and increases the chances that ULTA will raise guidance.

Obviously, there is a lot that can be done with that information, from a trading perspective.

On TD Ameritrade Network, our founder shared his plan for thinking through how to play things if ULTA moves down after this earnings report:

Video courtesy of TD Ameritrade Network

The key takeaway here is clear — access to unique and powerful consumer data can be used for more than just predicting backward looking earnings reports… it can also give us an edge on understanding how the company, and eventually investors, will be predicting future revenues as well.

Want access?  A season pass is only $99 and gives you three full months of Earnings Predictions, Opportunity Alerts, and access to our Research Dashboard!

Stay ahead of wallstreet, take a tour/buy now.

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