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While not a household name, small-cap stock Sally Beauty Holdings (NYSE: $SBH ) has momentum behind it.

Based in Texas and a going concern since 1964, Sally Beauty is a specialty retailer and distributor of professional beauty supplies.

The company sells and distributes its beauty products through more than 4,000 stores, including approximately 200 franchise outlets located in the U.S., Canada and the United Kingdom (U.K.).

While a small-cap stock, Sally Beauty has a big business.

The company currently sells more than 6,000 products for hair, skin, and nails through professional lines such as Clairol, L'Oreal, and Conair, as well as its own merchandise.

SBH stock has had many ups and downs over the years but is currently on an upswing. So far in 2025, Sally Beauty's share price has risen 42% to trade at $15.19 U.S. per share.

The stock looks undervalued right now trading at just eight times future earnings estimates, which is less than half the current price-to-earnings ratio among S&P 500 listed companies.

The market capitalization is small at just $1.49 billion U.S. and there's no dividend offered. But many analysts seem to be recommending SBH stock as a momentum play.

Sally Beauty is also expected to do well during the year-end holiday shopping season. Like most retailers, the fourth quarter of the year is typically its best in terms of sales.

Over five years, the performance of SBH stock is less impressive, having gained only about 25%.

But for a small-cap stock that has momentum heading into Christmas, Sally Beauty Holdings might turnout to be a gift for investors.

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