Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Ulta Beauty Inc., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
The financial trajectory from 2018 to 2023 demonstrates a robust overall expansion in cash generation capabilities, characterized by a steady upward trend in both operating cash flows and free cash flow to the firm (FCFF), notwithstanding a temporary contraction in 2021.
- Operating Cash Flow Analysis
- Net cash provided by operating activities grew consistently from 779.4 million in 2018 to 1.1 billion in 2020. A decline was observed in 2021, where the figure fell to 810.4 million, representing a correction from the previous peak. However, a strong recovery followed, with operating cash flow ascending to 1.06 billion in 2022 and reaching a period high of 1.48 billion in 2023.
- Free Cash Flow to the Firm (FCFF) Trends
- FCFF exhibited significant growth over the six-year period, increasing from 338.7 million in 2018 to 1.17 billion in 2023. The most substantial relative increase occurred between 2018 and 2019, where FCFF nearly doubled. While 2021 saw a reduction to 663.8 million, the subsequent years showed accelerated growth, culminating in a peak that reflects a heightened capacity to generate cash available to all capital providers.
- Cash Conversion and Investment Efficiency
- The relationship between operating cash flow and FCFF indicates a disciplined approach to capital expenditure. The conversion of operating cash into FCFF improved markedly over the timeframe. In 2018, FCFF represented approximately 43% of operating cash flow; by 2023, this ratio increased to approximately 79%, suggesting that a larger portion of operational cash is being retained as free cash flow rather than being deployed into capital investments.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Interest Paid, Net of Tax
Ulta Beauty Inc., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
2 2023 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 2,138 × 24.40% = 522
The financial trajectory between 2018 and 2023 is characterized by a stabilization of tax obligations and a substantial reduction in net interest expenditures during the latter part of the period.
- Effective Income Tax Rate Trends
- A notable decline in the effective income tax rate is observed from 2018 to 2020, falling from 29.40% to 22.10%. Subsequently, the rate entered a period of stability, maintaining a narrow range between 23.90% and 24.40% from 2021 through 2023.
- Net Interest Cash Outflows
- Cash paid for interest, net of tax, experienced a significant contraction between 2021 and 2022, decreasing from 5,317 thousand USD to 1,622 thousand USD. This downward shift was followed by a period of consolidation, with the 2023 value remaining nearly flat at 1,616 thousand USD.
- Comparative Analysis
- The sharp decline in net interest payments between 2021 and 2023 occurred while the effective income tax rate remained virtually constant. This suggests that the reduction in cash outflows was driven by factors independent of tax shield fluctuations, such as a reduction in total debt principal or more favorable financing terms.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Enterprise Value to FCFF Ratio, Current
Ulta Beauty Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 20,073,042) |
| Free cash flow to the firm (FCFF) | 1,171,405) |
| Valuation Ratio | |
| EV/FCFF | 17.14 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Amazon.com Inc. | 281.35 |
| Home Depot Inc. | 28.41 |
| Lowe’s Cos. Inc. | 18.89 |
| TJX Cos. Inc. | 29.96 |
| EV/FCFF, Sector | |
| Consumer Discretionary Distribution & Retail | 57.38 |
| EV/FCFF, Industry | |
| Consumer Discretionary | 47.37 |
Based on: 10-K (reporting date: 2023-01-28).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Ulta Beauty Inc., historical EV/FCFF calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Enterprise value (EV)1 | 25,061,395) | 20,241,372) | 15,984,243) | 9,320,863) | 20,013,289) | 11,990,299) | |
| Free cash flow to the firm (FCFF)2 | 1,171,405) | 888,700) | 663,806) | 802,759) | 636,727) | 338,652) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 21.39 | 22.78 | 24.08 | 11.61 | 31.43 | 35.41 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Amazon.com Inc. | 45.92 | — | — | — | — | — | |
| Home Depot Inc. | 27.17 | 25.12 | 20.22 | — | — | — | |
| Lowe’s Cos. Inc. | 19.56 | 19.56 | 14.88 | — | — | — | |
| TJX Cos. Inc. | 31.93 | 33.03 | 18.30 | — | — | — | |
| EV/FCFF, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 38.32 | 111.04 | 130.00 | — | — | — | |
| EV/FCFF, Industry | |||||||
| Consumer Discretionary | 33.07 | 51.09 | 60.31 | — | — | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 25,061,395 ÷ 1,171,405 = 21.39
4 Click competitor name to see calculations.
Analysis of the financial metrics from February 2018 to January 2023 reveals a period of significant valuation volatility paired with a general strengthening of cash flow generation. While Enterprise Value experienced sharp fluctuations, Free Cash Flow to the Firm maintained a predominantly positive trajectory, leading to a normalization of the valuation multiple over the observed period.
- Enterprise Value Trends
- Enterprise Value exhibited substantial volatility, peaking at approximately 20.01 billion in February 2019 before experiencing a sharp contraction to 9.32 billion by February 2020. Following this trough, a consistent recovery was observed, with the value ascending to a period high of 25.06 billion by January 2023.
- Free Cash Flow to the Firm (FCFF) Performance
- FCFF demonstrated a strong growth trend, increasing from 338.65 million in 2018 to 1.17 billion in 2023. Notably, cash flow generation remained resilient during the 2020 fiscal year, reaching 802.76 million despite the concurrent decline in Enterprise Value. After a slight retraction in 2021, the firm achieved accelerated growth in its cash flow capabilities through 2023.
- EV/FCFF Ratio Interpretation
- The EV/FCFF ratio reflects a significant valuation adjustment. Starting at a high of 35.41 in 2018, the ratio plummeted to a minimum of 11.61 in 2020, driven by the divergence between falling enterprise value and rising free cash flow. From 2021 onward, the ratio stabilized, fluctuating between 21.39 and 24.08, suggesting a shift toward a more sustainable valuation baseline relative to the firm's cash-generating capacity.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?