e.l.f. Beauty (NYSE: ELF) may be more than just a pretty face. This cosmetics brand, popular among teenagers, has shown remarkable growth recently. It has almost doubled in value over the past year and increased more than fivefold in two years. This has been driven by substantial earnings and revenue expansion. In its Q4 results, earnings rose 26% to 53 cents per share. Expectations were for a 21% decline. The company’s sales rocketed 71% YoY to $321.1 million. However, the company’s guidance was cautious, and market experts warned of a slowdown in the beauty products market. Even so, analysts are currently very upbeat, and the stock boasts an A- Accumulation/Distribution Rating, indicating significant institutional investment.
Who Is Elf Beauty?
e.l.f. Beauty, Inc. sells cosmetics for “eyes, lips, and face,” in addition to skincare and bath products. Founded in 2004, e.l.f. Beauty products are sold in 17 countries and are carried in stores like Kmart, Target, Walmart and Dollar General. e.l.f. Beauty products are 100% cruelty-free, and it’s a brand that’s highly favored by Gen Z. In fact, the company saw that by focusing on an affordable and socially responsible line of beauty products, advertising on TikTok, and catering to the Generation Z demographic, it could boost its sales. In 2021-2022, following this Gen Z pivot, the company reported a 49% increase in sales.
Does Elf Have Longevity?
Analysts anticipate earnings declines in the upcoming two quarters, which would mark the first such occurrences since late 2022. While past performance has been stellar, with earnings growth of 98% and 92% in the last two fiscal years, projections for the current year are more modest at 7% growth. Despite this concern for long-term growth, analysts, for now, are upbeat. Following the Q4 report, Jon Anderson of William Blair kept his outperform rating, while Cowen upped its price target from 190 to 235, keeping its buy rating. The consensus rating, based on 14 analysts, is a strong buy, with an average price target of $207.
Neither Julie Stoller nor Stocks.News have positions in this company.
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Contributing Writer
As a professional writer since 2012, Julie Stoller has covered many industries, from healthcare and technology to consumer products and industrials. She has written about IPOs, spinoffs, ETFs, stock splits, commodities, legislative actions impacting investors, and macroeconomic issues. While keeping up with the latest meme stocks and trends, Julie's special interests are discovering ...