Ulta Beauty Inc (NASDAQ:ULTA) stock tanked yesterday on rumors that Amazon.com, Inc. (NASDAQ:AMZN) will bring more cosmetics products to its website through an expanded partnership with Violet Grey. Yesterday’s sell-off is a continuation of a broader downtrend in the once hot ULTA stock.

Since June 1, Ulta Beauty is down about 20%. Is this an opportunity to buy a secular growth stock at a discount?

I think so. Here’s why.

Ulta Beauty Is NOT Amazon’s Next Victim

You’ve heard the story in retail, right? Everyone is falling victim to Amazon, right? I mean, Amazon is going to take over all of retail, right?

Well, if you look at Ulta Beauty’s most recent quarterly results, the answer would be “wrong.”

In May, ULTA reported results that were the envy of everyone in retail. Comparable sales rose a jaw-dropping 14%. By comparison, Macy’s Inc (NYSE:M), Kohl’s Corporation (NYSE:KSS), Nordstrom, Inc. (NYSE:JWN) and J C Penney Company Inc (NYSE:JCP) all reported negative comparable sales growth last quarter.

Ulta Beauty’s positive comp was comprised of a 9% increase in transactions and a 5% increase in average ticket. By comparison, Wal-Mart Stores Inc (NYSE:WMT), which is being praised as a retail survivor, saw transactions grind higher by only 1.5% last quarter while average ticket fell 0.1%.

Meanwhile, ULTA said retail comps climbed 11% higher. Salon comps jumped 10% higher. E-commerce sales roared 71% higher. By comparison, Target Corporation (NYSE:TGT) only saw digital sales growth of 22% last quarter.

ULTA’s operating margins climbed 60 basis points higher. By comparison, margins across the board at pretty much all other retailers are getting squeezed against this persistently promotional backdrop.

At the end of the day, Ulta Beauty isn’t just another retailer that is going to be Amazon-ed. The numbers just don’t support this thesis. In fact, they strongly support the thesis that ULTA is its own secular growth narrative, which is completely different than the traditional retail narrative.

For many quarters, the market believed in this thesis. ULTA stock continued to roar higher quarter after quarter as the company delivered impressive results.

But now the market has suddenly changed its mind. And why? For no good reason.

Not Much Has Changed for ULTA

Not much has really changed in the cosmetics world that will affect ULTA’s operating results now or in the future.

Big department stores are starting to more aggressively discount their cosmetic products. That does create a more promotional cosmetics selling backdrop, and may likely weigh somewhat on either ULTA’s comp growth or margins. But cosmetics isn’t what big department stores do; cosmetics is what ULTA does. That means the company has a broader selection of cosmetic goods, and therefore is a far more appealing cosmetics destination than a department store.

Big department stores are also in malls; whereas, Ulta stores are normally outside of malls. That means getting to a department store for just make-up is a hassle. You have to deal with mall parking and you have to navigate through hoards of shoppers. Going to an Ulta for make-up doesn’t really have any of those friction points.

So lets disregard the department store discounting fear. It’s irrational.

The other big fear is that Amazon is going to expand its cosmetics offerings online, and that this will in-turn eat into Ulta’s market share. Of course that is somewhat of a threat, but nothing has really happened on that front yet. Any fears at this point feel premature.

Bottom Line on ULTA Stock

Even if it does happen and Amazon buffs out its cosmetics selection, why would shoppers immediately migrate from a trusted name in the cosmetics space (Ulta) to an un-trusted name in the cosmetics space (Amazon)? That sort of transition doesn’t just happen, and Ulta has developed a huge moat due to both its huge selection of products and its brand. It will take a while for Amazon to chip away at that moat.

So lets also disregard the Amazon fear. It’s equally irrational.

With those two fears out of the way, whats holding back ULTA stock? Nothing. And the market will soon see it this way when Ulta Beauty reports its next quarterly results and the numbers are just as impressive as last quarter.

This is a rare opportunity to buy a secular growth stock at a discount. Buy-and-hold is my simple strategy here.

As of this writing, Luke Lango was long ULTA, AMZN, WMT and TGT.