Why Ulta Beauty (ULTA) Is Set to Reign Supreme as the Top Cosmetics Stock in 2025
We recently released a list of
12 Top Cosmetics Stocks to Consider Buying in 2025
In this article, we will be examining the position of Ulta Beauty, Inc. (NASDAQ:
ULTA
) is pitted against other top cosmetic industry stocks to invest in for 2025.
Summary of the Cosmetic Sector
As reported by Grand View Research, the worldwide cosmetics market was valued at approximately $295.95 billion in 2023. This sector is projected to expand with a compound annual growth rate of 6.1% from 2024 to 2030. A key catalyst for this development is the growing consumer focus on enhancing personal aesthetics. Items like make-up, hair-care solutions, skincare items, and colored cosmetics have turned into daily necessities, boosting their popularity further. Additionally, the rise of eco-friendly options—such as non-toxic, all-natural, and organic beauty goods—is also fueling the extension of this marketplace.
The online cosmetics market is showing comparable patterns. As stated in a report from Mordor Intelligence, this sector was valued at $16.23 billion in 2025. The same document projects an expansion with a compound annual growth rate of approximately 8.47% over the next few years, which would bring the total value up to around $24.37 billion by the conclusion of the forecasting horizon in 2030.
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How Might Trump’s Tariffs Affect the American K-Beauty Cosmetics Sector?
While South Korea leads in cosmetic imports, President Trump might approve a potential 25% tariff on goods from this nation following a 90-day delay on most of his proposed retaliatory tariffs. According to data compiled by the U.S. International Trade Commission and shared by CBS News on April 16, over $7.5 billion worth of cosmetics were brought into the U.S. last year alone. Among these, approximately $1.7 billion originated from South Korea, reflecting an upsurge driven largely by increased sales of Korean skin-care, hair-care, and make-up items through American retail channels. A key factor behind this surge can also be attributed to social media personalities who frequently endorse K-beauty products.
Nonetheless, the introduction of Trump’s tariffs might lead to substantial increases in prices for these goods, prompting consumers to “stock up” on their preferred Korean items, reports CBS News. This shift has become concerning for the Personal Care Products Council, an organization that represents over 600 companies including Estée Lauder, Procter & Gamble, L’Oréal, and Neutrogena.
The organization expressed in a statement their particular “alarm regarding trade policies that might lead to increased costs for individual grooming items,” noting further that American customers utilize “approximately six to twelve such goods daily, encompassing items like sunblock, toothpaste, shampoo, lotion, and perfume.”
Our Methodology
To create our compilation of 40 cosmetic stocks, we examined stock screeners, analyzed financial news outlets, and reviewed various ETFs. From this research, we identified the top 12 favorites amongst hedge funds for the fourth quarter of 2024. These selections are arranged based on increasing levels of hedge fund interest. Our information regarding hedge fund sentiment was obtained from Insider Monkey’s records.
Why do we focus on the stocks that hedge funds amass? It’s straightforward: our analysis indicates that mimicking the top choices from leading hedge funds allows us to surpass market performance. Each quarter, our monthly publication recommends 14 small-cap and large-cap stocks, achieving returns of 373.4% since May 2014, which significantly outperforms its benchmark by 218 percentage points.
see more details here
).
An image showing a shopper trying various items in the skin care section at a retail outlet.
Ulta Beauty, Inc. (NASDAQ:
ULTA
)
Number of Hedge Fund holders: 47
Ultа Bеauty, Іnc. (NАSDAQ:ULТA), а bееutу rеtailer, рrоduсеs а vаriety оf gоods cаtесorizеd іnto sеgmеnts lіkе hаir сarе, skіn саre, mасkuраtion, stylіng, аnd muсh mоre. Тhе соmрanу’s brаnds аlso fеaturе а numbег оf bееutу ѕerviсеѕ thаt covеr hаir, мakeup, skіn trеatment, аnd еyebrows. А tурicаl Ultа Bеauty ѕtorе dеsign іnfuseѕ а nеgоtiаblе salоn spacе wіthіn whаt’ѕ knоwn аs thе salоn flооr. Thіs аrrangemеnt prеsentѕ custоmers wіth а frеsh shаріng еxperіencе thаt unifіes “Еvеrythyng Bееuty” undеrgіft оne roοf.
The company’s physical store presence along with its online platform form crucial elements of its overall strategy. In its retail locations, it stocks numerous beauty brands, facilitates curbside pickup options, and delivers products directly to customers. Additionally, the firm collaborates through shop-within-a-shop arrangements like its deal with Target.
On April 8, Simeon Gutman from Morgan Stanley issued a report maintaining a Buy recommendation for Ulta Beauty, Inc. (NASDAQ:ULTA), with a targeted share price of $460.00. He remains optimistic about the firm’s prospects because of its robust growth opportunities and dominant standing within the industry. Concentrating efforts on the U.S. market, the company has shown durability in the cosmetics sector, enabling it to better navigate through financial instabilities.
The analyst informed investors that Ulta Beauty, Inc.’s (NASDAQ:ULTA) procurement approach minimizes tariff risks due to reliance on a robust local supply network, reinforcing its stability during worldwide trade conflicts. Additionally, the firm is executing various plans aimed at boosting revenue and enhancing brand presence through new product launches as well as ventures into tailored services and health-focused items. Notably, Ulta Beauty, Inc. (NASDAQ:ULTA) holds zero debt, placing it at number three among top picks for purchasing cosmetic sector stocks currently, thus presenting an attractive opportunity for potential investments.
Overall, ULTA
ranks 3rd
Among the top cosmetic industry stocks recommended for purchase in 2025, we recognize the appeal of investing in ULTA. However, we feel strongly that certain artificial intelligence (AI) stocks present even better opportunities for substantial gains over a quicker period. One particular AI stock has seen growth year-to-date in 2025 despite many leading AI companies experiencing declines close to 25%. For those seeking an AI equity with stronger prospects compared to ULTA yet trading below five times its earnings, refer to our detailed analysis available in our latest report.
cheapest AI stock
.
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Disclosure: There are no conflicts of interest. This article was initially published here.
Insider Monkey
.