Is Ulta Beauty, Inc. overvalued or undervalued?

As of 30 May 2025, Ulta Beauty, Inc. has moved from an attractive to a fair valuation grade. The company is currently fairly valued based on its financial metrics. The P/E ratio stands at 18, while the EV to EBITDA ratio is 11.39 and the ROE is a strong 49.09%.
In comparison to peers, Walmart, Inc. is considered very expensive with a P/E of 35.54, while Target Corp. is rated attractive with a P/E of 10.23. Ulta's valuation appears reasonable given its performance relative to the industry, especially considering its robust ROCE of 69.80%. Additionally, Ulta has outperformed the S&P 500 over the past year, returning 22.85% compared to the index's 10.26%, which reinforces its fair valuation status.