ULTA heads into its June 2 earnings date with short sellers rebuilding positions, options traders adding downside protection, and a stock already nursing a 6% weekly loss — even as the Street broadly remains bullish.
The sharpest development this week is the pace at which bears have returned. Short interest jumped 23.5% over the past month to 5.1% of free float, the most concentrated short position this name has carried in that window. The month's move is striking in its shape: positions were broadly flat from late March through early April, then stepped up sharply around April 10 and accelerated again this week, reaching 2.28 million shares short as of April 29. That is not a crowded short in absolute terms, but the pace of accumulation is noteworthy. Days to cover runs close to 3.9, meaning any forced unwind would not be trivial.
The borrow market does not yet reflect urgency. Availability remains ample — cost to borrow is just 0.47% annualised, and it actually fell 14% on the week. Availability is wide enough that new shorts face no meaningful friction to open positions. That combination — rising short interest alongside cheap, easy borrow — points more to a deliberate fundamental bet than to a squeeze or momentum pile-on. Options positioning adds texture: the put/call ratio has drifted to 0.97, roughly one standard deviation above its 20-day average of 0.91. It is not an alarm reading — the 52-week high is 1.39 — but the direction of travel over the past four weeks is clear, from a low of 0.52 in late March to nearly parity today. Put demand has quietly accumulated alongside the short rebuild.
The Street remains firmly in ULTA's corner despite the post-earnings trimming cycle that followed the March 12 print. Jefferies stood out last week with an upgrade to Buy and a raised target of $700, one of the more constructive moves in recent weeks. JPMorgan holds Overweight at $750 and Morgan Stanley sits at Overweight with a $700 target — both trimmed from higher levels in March but kept positive ratings. The mean analyst price target of $681.50 implies roughly 29% upside from the current $530.23 price. Bulls lean on the 5.8% comparable sales beat and mid-teens e-commerce growth in the back half of 2025, alongside forward EPS growth projections that rank in the 93rd percentile of the universe. Bears counter with margin pressure — gross margin eased to 38.1% in the latest quarter — and an upcoming end to the Target partnership that complicates the distribution picture. The RSI sits at a soft 39.5, suggesting the stock is approaching oversold territory but has not triggered a clear reversal signal.
The March 12 earnings result left a mark that is hard to ignore. The stock fell 17.9% the day after reporting and was still down 18.2% five days later — among the more severe single-event drawdowns this name has seen. Shorts that initiated around April 9-10 — when positions accelerated meaningfully — would already be in the money if they held through this week's 6% decline. That context matters: the next print on June 2 follows a quarter where the bar was dramatically reset lower, so the dynamics heading in are genuinely different from the setup that preceded March's miss.
The June 2 date is the clearest near-term focus. Consensus points to forward growth recovering sharply, but the borrow market is cheap and short positions are building — worth watching whether that short interest continues to rise into the print, or whether the recent upgrade cycle draws in enough long buying to stabilise the stock above the $510-520 support area before the release.
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