Analysis of Selling Put Options for Ulta Beauty
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy ULTA?
Source: NASDAQ.COM
- Options Selling Risk: Selling put options for Ulta Beauty does not provide the same upside potential as owning shares, as the seller only acquires shares if the contract is exercised, and if the stock does not fall to $430, the seller only earns a 3.7% annualized return.
- Exercise Condition Analysis: The contract will only be exercised if Ulta's stock price drops 33.5% to $430, resulting in a cost basis of $400 per share after commissions, meaning the seller's only profit comes from the option premium.
- Historical Volatility Reference: Ulta Beauty's trailing twelve-month volatility is calculated at 36%, which, when combined with fundamental analysis, can help assess whether selling the January 2028 put at the $430 strike is a worthwhile risk-reward scenario.
- Market Price Comparison: With Ulta's current stock price at $646.54, the comparison of potential earnings from selling put options against market prices illustrates the risk-reward balance for sellers under current market conditions.
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Analyst Views on ULTA
Wall Street analysts forecast ULTA stock price to rise
22 Analyst Rating
15 Buy
6 Hold
1 Sell
Moderate Buy
Current: 642.220
Low
450.00
Averages
647.83
High
780.00
Current: 642.220
Low
450.00
Averages
647.83
High
780.00
About ULTA
Ulta Beauty, Inc. is a specialty United States beauty retailer and the premier beauty destination for cosmetics, fragrance, skincare products, haircare products and salon services. The Company operates approximately 1,451 retail stores across 50 states and distributes products through its Website, which includes a collection of tips, tutorials, and social content. The Company’s business includes a differentiated assortment of approximately 29,000 beauty products across a variety of categories and price points, as well as a variety of beauty services, including salon services, in more than 1,400 stores predominantly located in convenient, high-traffic locations. It also offers digital experiences delivered through its Website, Ulta.com, and its mobile applications. The Company’s brands include Ulta Beauty Collection, about-face, Ariana Grande, CHANEL, FENTY BEAUTY by Rihanna, It Cosmetics, LolaVie, OUAI, PAT McGRATH LABS, Tula, and NYX Professional Makeup.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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