Sally Beauty Holdings, Inc. (SBH) AI Stock Analysis
SBH AI stock analysis summary
AI ResearchSally Beauty Holdings, Inc. (SBH) is a specialty retailer and distributor of professional beauty supplies with over 4,700 stores across its SBS and BSG segments. Over the trailing twelve months, the company generated $3.73B in revenue with an operating margin of 9.3% and EPS of $1.95. Despite a modest 1.0% five-year revenue CAGR from FY2020 to FY2025, it maintains a low forward P/E of 7.4x.
- Market cap
- $1.56B
- Revenue (TTM)
- $3.73B
- P/E
- 8.5x fwd 7.4x
- 1Y return
- 12.4% S&P 500 16.8%
- Avg. target
- $17.00 2.1% vs last close
Bull case
- Free cash flow reached $172.7M in FY2025, funding $54.0M in share buybacks and supporting a 14.1% reduction in share count over 5 years.
- The stock trades at a forward P/E of 7.4x, well below the US-listed Consumer Cyclical peer median of 14.1x.
- Earnings per share showed strong quarterly momentum, with earnings growth rising 25.0% year-over-year in the quarter ended June 30, 2026.
Bear case
- Total debt of $1.52B significantly exceeds cash and short-term investments of $173.1M as of June 30, 2026.
- Annual revenue has contracted in four consecutive fiscal years, declining from $3.87B in FY2021 to $3.70B in FY2025.
- Short interest is notably elevated, with short percent of float standing at 28.6%.
What Sally Beauty does
Established in 1964 and headquartered in Denton, Texas, Sally Beauty Holdings, Inc. operates as a specialized retailer and distributor of professional beauty supplies across two segments: Sally Beauty Supply (SBS) and Beauty Systems Group (BSG). SBS sells hair color, hair care, styling tools, cosmetics, and skin and nail care products through retail stores and digital platforms. BSG distributes professional-grade products directly to salons and licensed professionals through professional-only stores, e-commerce, sales consultants, and franchised Armstrong McCall stores. As of November 2022, the company operated a combined total of over 4,700 stores across both segments.
Growth and profitability
Revenue was $3.87B in FY2021 before moderating to $3.82B in FY2022, $3.73B in FY2023, $3.72B in FY2024, and $3.70B in FY2025, reflecting a 5-year revenue CAGR of 1.0% from FY2020 to FY2025. Despite revenue declining 0.4% in FY2025, gross margin expanded to 51.6% from 50.4% in FY2021. Net income reached $195.9M in FY2025 with diluted EPS of $1.91, up from $153.4M and $1.69 in FY2024. For the latest quarter ended June 30, 2026, quarterly revenue growth was 0.2% year-over-year, while quarterly earnings grew 25.0%. Trailing twelve months revenue stands at $3.73B.
Balance sheet and cash flow
As of June 30, 2026, Sally Beauty held $173.1M in cash and short-term investments against total debt of $1.52B, resulting in net debt of $1.34B. Total assets stood at $2.88B and shareholders' equity was $871.5M, yielding a debt-to-equity ratio of 1.74 and a current ratio of 2.37. In FY2025, the company produced $274.8M in operating cash flow and $172.7M in free cash flow, deploying $102.1M into capital expenditures and $54.0M into share buybacks.
Valuation and performance
At a share price of $16.65, Sally Beauty carries a market cap of $1.56B and an enterprise value of $2.91B. The stock trades at a trailing P/E of 8.5x and a forward P/E of 7.4x, both below the median of its US-listed Consumer Cyclical peers of 18.0x and 14.1x, respectively. Its EV/EBITDA stands at 7.0x compared to the peer median of 11.1x. Over the past year, the stock returned 12.4%, lagging the S&P 500 (SPY) return of 16.8%, and gained 3.7% over 5 years versus 83.0% for SPY.
What analysts expect
Wall Street analyst sentiment includes 2 Strong Buy, 1 Buy, 1 Hold, 0 Sell, and 1 Strong Sell ratings. The mean price target is $17.00, representing a 2.1% premium to the last close of $16.65. For the current fiscal year ending September 30, 2026, analysts estimate EPS of $2.07 and revenue of $3.73B. The company beat EPS estimates in each of the last 4 quarters, with the next earnings announcement scheduled for November 12, 2026.
Key risks and what to watch
- Balance sheet leverage remains elevated, indicated by a debt-to-equity ratio of 1.74 as of June 30, 2026.
- Long-term sales expansion has stagnated, demonstrated by a 5-year revenue CAGR of only 1.0% between FY2020 and FY2025.
- High short interest of 28.6% of float points to significant market skepticism regarding the company's operating outlook.
AI-generated research summary. Written with AI from Quotelinks data as of October 16, 2026 and checked so every figure matches that data. For information only, not investment advice. Disclaimer
About this SBH AI stock analysis
This page is an AI-written research summary of Sally Beauty Holdings, Inc. (SBH). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.
Related: SBH income statement, SBH balance sheet, SBH key metrics, SBH analyst forecast, SBH chart. See the SBH stock overview for the latest quote and news.
SBH AI stock analysis FAQ
Does Sally Beauty Holdings pay a dividend?
Sally Beauty Holdings does not currently pay a dividend, directing its capital allocation toward capital expenditures ($102.1M in FY2025) and share buybacks ($54.0M in FY2025).
What are analysts projecting for SBH's earnings?
For the fiscal year ending September 30, 2026, analysts estimate EPS of $2.07 on revenue of $3.73B, followed by EPS of $2.24 on revenue of $3.79B for the next fiscal year.
How much debt does Sally Beauty Holdings carry?
As of June 30, 2026, Sally Beauty held total debt of $1.52B against cash and short-term investments of $173.1M, resulting in net debt of $1.34B.
When is Sally Beauty Holdings' next earnings release?
The company is scheduled to report its next earnings on November 12, 2026.