Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
On Wednesday, DA Davidson reaffirmed their Neutral stance on e.l.f. Beauty shares (NYSE: NYSE:ELF), maintaining a price target of $80.00. The stock, currently trading at $64.49, has experienced a significant decline of 49% year-to-date, according to InvestingPro data. According to the firm, the brand’s Point of Sale (POS) figures in the U.S. market revealed a decline, with a year-over-year drop of 0.8% for the March quarter-to-date, a decrease from the previous 0.1% growth. The most recent weekly data showed a 6.8% dip in POS, marking a downturn in sales year-over-year for five of the past eight weeks. Despite these recent challenges, InvestingPro data shows the company maintains impressive gross profit margins of 71.1% and strong historical revenue growth of 46.3%.
The analysis by DA Davidson suggests that e.l.f. Beauty’s forecast for fourth-quarter fiscal year 2025, which anticipates sales ranging from a 1% decline to a 3% increase year-over-year, appears attainable. However, there is concern that the fiscal year 2026 guidance issued by the company could fall short of current market expectations, which predict an 11% increase in sales and a 13% rise in EBITDA.
The report also noted that e.l.f. Beauty’s recent product launches seem to be more iterative, offering variations on existing items rather than completely new offerings. DA Davidson’s price target is based on a multiple of 15 times the firm’s calendar year 2026 estimated EBITDA of $314 million. The firm mentioned that this valuation is under review and will depend on additional POS data for the quarter to assess the company’s performance more accurately.
In other recent news, e.l.f. Beauty has secured a $500 million revolving credit facility, which amends its existing credit agreement and introduces more favorable borrowing terms. This facility, maturing in 2030, provides the company with capital for various needs, including potential acquisitions, and reflects efforts to optimize its capital structure. On the analyst front, DA Davidson has maintained a Neutral rating on e.l.f. Beauty, citing concerns about sales data and future guidance, while Stifel has lowered its price target to $85, attributing the change to weaker-than-expected trends and lowered full-year guidance.
Meanwhile, Canaccord Genuity has reduced its price target to $105 but continues to hold a Buy rating, noting e.l.f. Beauty’s strong third-quarter sales growth despite missing earnings expectations. Raymond (NSE:RYMD) James also adjusted its price target downward to $120, maintaining a Strong Buy rating, and acknowledged the company’s conservative fourth-quarter outlook. The firm pointed to external factors affecting performance and expects e.l.f. Beauty to continue gaining market share.
These developments come as e.l.f. Beauty navigates challenges in the beauty industry, with adjustments in analyst ratings and targets reflecting varying perspectives on the company’s growth prospects. The company’s recent financial moves, including the credit facility and stock repurchase program, underscore its strategic initiatives amidst these industry dynamics.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.