Financial Contrast: Ulta Beauty (NASDAQ:ULTA) versus Bath & Body Works (NYSE:BBWI)

Ulta Beauty (NASDAQ:ULTA) and Bath & Body Works (NYSE:BBWI) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Insider and Institutional Ownership

90.4% of Ulta Beauty shares are owned by institutional investors. Comparatively, 95.1% of Bath & Body Works shares are owned by institutional investors. 0.4% of Ulta Beauty shares are owned by company insiders. Comparatively, 0.3% of Bath & Body Works shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Ulta Beauty has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500. Comparatively, Bath & Body Works has a beta of 1.83, indicating that its stock price is 83% more volatile than the S&P 500.

Earnings and Valuation

This table compares Ulta Beauty and Bath & Body Works”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ulta Beauty	$11.36 billion	1.73	$1.29 billion	$24.99	16.96
Bath & Body Works	$7.43 billion	1.09	$878.00 million	$4.10	9.13

Ulta Beauty has higher revenue and earnings than Bath & Body Works. Bath & Body Works is trading at a lower price-to-earnings ratio than Ulta Beauty, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ulta Beauty and Bath & Body Works’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ulta Beauty	10.58%	51.95%	20.88%
Bath & Body Works	12.43%	-44.03%	14.45%

Analyst Ratings

This is a summary of current ratings and target prices for Ulta Beauty and Bath & Body Works, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ulta Beauty	2	11	11	0	2.38
Bath & Body Works	1	6	9	0	2.50

Ulta Beauty currently has a consensus price target of $439.30, indicating a potential upside of 3.63%. Bath & Body Works has a consensus price target of $42.50, indicating a potential upside of 13.58%. Given Bath & Body Works’ stronger consensus rating and higher possible upside, analysts plainly believe Bath & Body Works is more favorable than Ulta Beauty.

Summary

Ulta Beauty beats Bath & Body Works on 9 of the 14 factors compared between the two stocks.

About Ulta Beauty

Ulta Beauty, Inc. operates as a specialty beauty retailer in the United States. The company offers branded and private label beauty products, including cosmetics, fragrance, haircare, skincare, bath and body products, professional hair products, and salon styling tools through its Ulta Beauty stores, shop-in-shops, Ulta.com website, and its mobile applications. It also offers beauty services, including hair, makeup, brow, and skin services at its stores. The company was formerly known as ULTA Salon, Cosmetics & Fragrance, Inc. and changed its name to Ulta Beauty, Inc. in January 2017. Ulta Beauty, Inc. was incorporated in 1990 and is based in Bolingbrook, Illinois.

About Bath & Body Works

Bath & Body Works, Inc. operates a specialty retailer of home fragrance, body care, and soaps and sanitizer products. It sells its products under the Bath & Body Works, White Barn, and other brand names through retail stores and e-commerce sites located in the United States and Canada, as well as through international stores operated by partners under franchise, license, and wholesale arrangements. The company was formerly known as L Brands, Inc. and changed its name to Bath & Body Works, Inc. in August 2021. Bath & Body Works, Inc. was founded in 1963 and is headquartered in Columbus, Ohio.