SBH Should I Buy
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Sally Beauty Holdings Inc (SBH) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown some positive growth in gross margin and EPS improvement in Q1 2026, the overall financial performance is mixed, with a significant YoY drop in net income and EPS. Technical indicators are neutral to slightly bearish, and options data suggests bearish sentiment with a high Put-Call ratio. Analysts are divided, with some maintaining a Buy rating but others expressing concerns about limited medium-term EBIT growth. For a long-term investor, it may be better to wait for more clarity on growth-driving initiatives and consistent financial improvement before committing funds.
The MACD is negative and expanding downward, indicating bearish momentum. RSI is neutral at 36.938, not signaling overbought or oversold conditions. Moving averages are bullish (SMA_5 > SMA_20 > SMA_200), but the stock is trading near support levels (S1: 15.125). Overall, technical indicators are mixed with a slight bearish bias.
Analysts have raised price targets recently, with TD Cowen and Canaccord maintaining Buy ratings and projecting a price target of $
Gross margin increased by 0.79% YoY in Q1
The company is implementing growth-driving initiatives and store improvements.
Net income dropped by 25.33% YoY, and EPS fell by 22.41% YoY in Q1
Comparable sales were flat, indicating no growth.
Options data shows bearish sentiment with a high Put-Call ratio.
Analysts like Morgan Stanley express concerns about limited medium-term EBIT growth.
In Q1 2026, revenue increased by 0.56% YoY to $943.17 million, and gross margin improved slightly to 51.24%. However, net income dropped by 25.33% YoY to $45.56 million, and EPS declined by 22.41% YoY to $0.45, reflecting mixed financial performance.
Analysts are divided. TD Cowen and Canaccord maintain Buy ratings with price targets of $20, citing growth-driving initiatives. However, Morgan Stanley raised its price target to $16 but kept an Underweight rating, citing concerns about limited EBIT growth. Raymond James upgraded the stock to Outperform with a $19 price target, citing faster and more consistent growth potential.
