The shares of Ulta Beauty, Inc. (NASDAQ:ULTA) and Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) were among the active stocks of the last trading sessions. Ulta Beauty, Inc. (NASDAQ:ULTA) soared to 4.81% closing at the price of $304.49 whereas the shares of Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) soared 14.72% with the increase of 3.01 points closing at the price of $23.46. Ulta Beauty, Inc. has currently increase 21.8% in its stock over the period of 6-months while its rival Vanda Pharmaceuticals Inc. added 40.9% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Ulta Beauty, Inc. (NASDAQ:ULTA) is 33.4% while the ROI of Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is -13%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, ULTA’s EBITDA Margin is 14.62 whereas VNDA’s is 394.98.
Both the profitability ratios suggest a mixed sentiment for Ulta Beauty, Inc. (NASDAQ:ULTA) and Vanda Pharmaceuticals Inc. (NASDAQ:VNDA).
EPS & Surprise Factor
Ulta Beauty, Inc. (NASDAQ:ULTA) reported $2.46/share EPS for the previous quarter where analysts were predicting an EPS to be $2.41/share Thus beating the analyst Estimates with a Surprise Factor of 2.1 Percent. While, Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) reported EPS of $0.13/share in the last quarter. The analysts projected EPS of $-0.03/share depicting a Surprise of 533.3 Percent.
Taking a look at Earnings per Share, Vanda Pharmaceuticals Inc. tends to be beating the analyst estimates more than Ulta Beauty, Inc.. so VNDA is more profitable than ULTA.
Technical Analysis of Ulta Beauty, Inc. & Vanda Pharmaceuticals Inc.
Moving average convergence divergence (MACD) shows that Ulta Beauty, Inc. (NASDAQ:ULTA) is on a PRICE RELATIVITY trend While Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Ulta Beauty, Inc. was in BULLISH territory and Vanda Pharmaceuticals Inc. was in BULLISH territory.
ULTA’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While VNDA’s candle is BULLISH with HIGH.
EPS Growth Rate: ULTA’s 20.32% versus VNDA’s 0%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Ulta Beauty, Inc. (NASDAQ:ULTA) is predicted at 20.32% while Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) stands at 0%. These numbers suggest that ULTA is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of ULTA stands at 2.4 while VNDA is at 5.7 whereas the debt ratio of the prior is 0 while the debt ratio of the later is 0.
The values of the both ratios suggest that one is more liquid and other investment is more risk free.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2 for ULTA and 1.5 for VNDA which means ULTA has Buy rating whereas VNDA has Buy rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for ULTA is $282.71 which is -7.7% of its current price while VNDA has price target of 24.29 which is 3.42% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
ULTA currently has price to earning P/E ratio of 28 whereas VNDA has 3351.43 while the forward P/E ratio for the prior stands at 23.76 and for the later it depicts the value of 50.45.
The price to Book P/B for ULTA is 10.09, Price to Sale is at 2.79 and for VNDA these ratios stand at 4.87 and 6.9.