e.l.f. Beauty (ELF) AI Stock Analysis

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e.l.f. Beauty

(NYSE:ELF)

67Neutral

e.l.f. Beauty's strong financial performance and positive earnings call sentiments are tempered by bearish technical indicators and a high valuation. The company's consistent growth and market position are strengths, while cash flow efficiency and external challenges present areas for improvement.

Positive Factors

Growth Opportunity

ELF is a disruptive beauty company with better growth opportunity than legacy brands.

Market Share

ELF's market share grew year-over-year in the latest week and over the last four weeks, indicating increasing consumer interest.

Product Launch

A major product launch is expected in April.

Negative Factors

Guidance Miss

FY26 guidance could miss the Street's sales +10% and EBITDA +11%.

Sales Decline

ELF US scanner sales growth declined to -4.1% year over year in the latest two weeks and declined -6.0% year over year in the last week.

Velocity Decrease

ELF velocity was down approximately 11% year-over-year, indicating a decrease in the speed of sales.

e.l.f. Beauty (ELF) vs. S&P 500 (SPY)

Market Cap

$3.02B

Dividend YieldN/A

Average Volume (3M)2.87M

Price to Earnings (P/E)31.0

Beta (1Y)1.55

Revenue Growth46.27%

EPS Growth-26.45%

CountryUS

Employees475

SectorConsumer Cyclical

Sector Strength63

IndustryHousehold & Personal Products

Share Statistics

EPS (TTM)1.68

Shares Outstanding56,398,610

10 Day Avg. Volume3,858,565

30 Day Avg. Volume2,865,930

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.72

Price to Cash Flow (P/CF)-60.30

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$89.46

Price Target Upside79.10% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering15

e.l.f. Beauty Business Overview & Revenue Model

Company Descriptione.l.f. Beauty (ELF) is a cosmetics company known for providing high-quality, affordable makeup and skincare products. The company operates primarily in the beauty and personal care sector, offering a wide range of products including cosmetics, skincare, beauty tools, and accessories. e.l.f. Beauty is recognized for its commitment to cruelty-free and vegan formulations, appealing to a broad demographic of beauty enthusiasts who prioritize ethical considerations in their purchasing decisions.

How the Company Makes Moneye.l.f. Beauty makes money through the sale of its diverse product line, which includes cosmetics, skincare items, and beauty tools. The company's primary revenue stream is derived from its direct-to-consumer sales through its official website and retail partnerships with major chains such as Target, Walmart, and Ulta Beauty. e.l.f. Beauty also leverages e-commerce platforms to reach a wider audience, optimizing online sales channels to enhance profitability. The company's focus on affordable, high-quality products allows it to capture a significant market share in the beauty industry, fostering customer loyalty and repeat purchases. Additionally, e.l.f. Beauty's strategic marketing initiatives, collaborations, and product innovations contribute to its revenue growth and brand expansion.

e.l.f. Beauty Financial Statement Overview

Summary

e.l.f. Beauty demonstrates strong financial health with impressive revenue and profit growth, solid margins, and a balanced approach to debt. However, there is potential to improve cash flow conversion, which would further enhance financial resilience.

Income Statement

Very Positive

e.l.f. Beauty demonstrates strong financial performance in the TTM period with a gross profit margin of 71.1% and a net profit margin of 8.9%. The company shows significant revenue growth, with a 28.8% increase from the previous annual period. EBIT and EBITDA margins are healthy at 10.0% and 12.9%, respectively. The consistent revenue growth trajectory and robust margins indicate a successful strategy in the competitive consumer products industry.

Balance Sheet

Positive

The balance sheet reveals a stable financial position with a debt-to-equity ratio of 0.39, reflecting moderate leverage. Return on equity stands at a strong 15.2%, indicating effective utilization of equity capital. The equity ratio is 60.7%, suggesting a solid equity base relative to total assets. Overall, the company maintains a healthy balance sheet with sustainable leverage levels.

Cash Flow

Positive

While e.l.f. Beauty's operating cash flow to net income ratio is 0.30, indicating some challenges in converting income to cash, the free cash flow has grown significantly, supported by positive free cash flow in the TTM. The free cash flow to net income ratio is 0.21, which suggests room for improvement in cash generation relative to net income. Cash flow management is stable but could benefit from enhanced efficiency.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
1.30B	1.02B	578.84M	392.15M	318.11M	282.85M
	Gross Profit
925.85M	724.10M	390.40M	251.73M	206.20M	181.12M
	EBIT
130.74M	149.68M	68.14M	29.77M	9.40M	29.95M
	EBITDA
168.75M	188.31M	89.88M	54.63M	32.12M	53.34M
	Net Income Common Stockholders
116.40M	127.66M	61.53M	21.77M	6.23M	17.88M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
14.81M	108.18M	120.78M	43.35M	57.77M	46.17M
	Total Assets
364.17M	1.13B	595.60M	494.63M	487.39M	453.10M
	Total Debt
139.90M	290.60M	77.66M	112.61M	146.62M	149.90M
	Net Debt
125.09M	182.42M	-43.12M	69.26M	88.85M	103.73M
	Total Liabilities
230.92M	486.68M	184.58M	182.20M	217.75M	210.93M
	Stockholders Equity
133.26M	642.57M	411.02M	312.43M	269.65M	242.17M
Cash Flow		Free Cash Flow
24.62M	62.49M	100.16M	14.70M	23.00M	34.89M
	Operating Cash Flow
34.76M	71.15M	101.88M	19.51M	29.48M	44.31M
	Investing Cash Flow
-11.44M	-284.66M	-1.72M	-4.82M	-6.47M	-35.34M
	Financing Cash Flow
-24.38M	200.94M	-22.73M	-29.11M	-11.40M	-16.68M

e.l.f. Beauty Technical Analysis

Technical Analysis Sentiment

Negative

Last Price49.95

Price Trends

50DMA

66.28

Negative

100DMA

95.56

Negative

200DMA

118.04

Negative

Market Momentum

MACD

-5.11

Positive

RSI

31.51

Neutral

STOCH

13.99

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ELF, the sentiment is Negative. The current price of 49.95 is below the 20-day moving average (MA) of 58.91, below the 50-day MA of 66.28, and below the 200-day MA of 118.04, indicating a bearish trend. The MACD of -5.11 indicates Positive momentum. The RSI at 31.51 is Neutral, neither overbought nor oversold. The STOCH value of 13.99 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ELF.

e.l.f. Beauty Risk Analysis

e.l.f. Beauty disclosed 14 risk factors in its most recent earnings report. e.l.f. Beauty reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

e.l.f. Beauty Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IPAR	76 Outperform	$3.36B	20.45	22.76%	2.92%	10.22%	7.55%
ELF	67 Neutral	$3.02B	31.02	14.24%	―	46.27%	-26.45%
EPC	63 Neutral	$1.45B	16.44	6.02%	2.03%	-1.24%	-10.95%
Sector *	60 Neutral	$7.23B	11.55	3.67%	4.04%	2.96%	-13.54%
NUS	57 Neutral	$300.90M	―	-19.90%	4.04%	-12.04%	-1796.38%
COTY	57 Neutral	$4.53B	40.12	0.33%	―	1.35%	-99.94%
EL	49 Neutral	$19.87B	147.29	-14.17%	3.71%	0.07%	-249.21%

* Consumer Cyclical Sector Average

Performance Comparison

ELF

e.l.f. Beauty

49.95

-116.31

-69.96%

The Estée Lauder Companies

52.66

-82.33

-60.99%

IPAR

Inter Parfums

102.45

-18.13

-15.04%

NUS

Nu Skin

5.61

-6.42

-53.37%

COTY

Coty

4.67

-5.96

-56.07%

EPC

Edgewell Personal Care

29.22

-5.52

-15.89%

e.l.f. Beauty Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: -43.55% | Next Earnings Date: May 21, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong growth in net sales, market share, digital channels, and international markets. However, the company faced challenges with a softer start to 2025, slower-than-expected new product launches, and foreign currency losses impacting financials. Despite these challenges, e.l.f. Beauty, Inc. remains confident in its growth strategy and market position.

Highlights

Consistent Growth in Net Sales

e.l.f. Beauty, Inc. reported a 31% increase in net sales for Q3, marking the 24th consecutive quarter of net sales growth and market share gains. The company also reported a year-to-date net sales growth of 40%.

Market Share Expansion

The company increased its US market share by 220 basis points and became the number one unit brand at Target with over 20% share.

Strong International Performance

International net sales grew by 66% in Q3, with international sales accounting for 20% of total net sales, up from 15% the previous year.

Growth in Digital Channels

Digital consumption trends were up nearly 30% year-over-year, with digital channels driving 24% of consumption in Q3.

Skincare Category Performance

e.l.f. Skin continued to outperform the category, becoming a top ten skincare brand, and the acquisition of Naturium doubled their skincare penetration to 18% of retail sales.

Lowlights

Soft Start to Calendar 2025

Consumption trends in early 2025 were softer than expected, attributed to a declining category, lower social conversations around beauty, and the impact of external events like LA wildfires and TikTok uncertainties.

New Product Launch Challenges

Initial reads for new product launches for Spring 2025 started slower than expected, impacting sales projections.

Adjusted Sales Outlook

The company lowered its net sales outlook for the final quarter of the fiscal year to between minus 1% and plus 2%.

Foreign Currency Loss

Adjusted EBITDA and net income were impacted by an unanticipated foreign currency loss of approximately $7 million.

Company Guidance

In the recent earnings call, e.l.f. Beauty, Inc. reported strong Q3 fiscal 2025 results, with net sales growing by 31% and adjusted EBITDA reaching $69 million. The company increased its US market share by 220 basis points, marking its 24th consecutive quarter of growth and market share gains. Despite a soft start to calendar 2025, e.l.f. remains optimistic, expecting 14% to 16% net sales growth in the second half of the fiscal year, although they revised Q4 sales outlook to a range of -1% to +2%. The company highlighted robust digital growth with digital consumption up nearly 30% year-over-year and international net sales rising by 66%, driven by expansion in markets like Germany and Mexico. e.l.f. Beauty, Inc. continues to focus on digital, color cosmetics, skincare, and international growth as key areas of opportunity.

e.l.f. Beauty Corporate Events

Executive/Board Changes

e.l.f. Beauty Appoints Charles Bergh to Board

Neutral

Apr 3, 2025

On March 31, 2025, Beth Pritchard resigned from e.l.f. Beauty’s Board of Directors after seven years of service, with no disagreements cited. The Board expressed gratitude for her contributions. Concurrently, Charles Victor Bergh was appointed as a Class III director, effective April 1, 2025, with a term expiring at the 2025 annual meeting of stockholders. Bergh, a Senior Lecturer at Harvard Business School and former President and CEO of Levi Strauss & Co., brings extensive leadership experience to the role.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.