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On Tuesday, DA Davidson reaffirmed a Buy rating on e.l.f. Beauty (NYSE:ELF) with a price target of $170.00. According to InvestingPro data, the stock has experienced significant pressure, declining nearly 12% in the past week and trading at a P/E ratio of 45.5x. The firm’s analyst, Linda Bolton Weiser, noted that e.l.f. Beauty’s U.S. tracked channel point-of-sale (POS) data showed a slight decline in the two weeks ending January 25, with year-over-year growth decreasing to 2.1% from 3.0%. This slowdown comes despite comparatively easier year-over-year comparisons and follows an impressive last twelve months revenue growth of 59%. InvestingPro subscribers have access to 18 additional key insights about ELF’s performance and valuation metrics.
The analyst expressed caution regarding e.l.f. Beauty’s upcoming financial guidance. With the company set to report earnings after the market closes on Thursday, Weiser anticipates a potential beat for the fiscal third quarter of 2025. However, she considers an upward revision of the fourth-quarter fiscal year 2025 guidance to be uncertain, given that consensus sales expectations represent a 19% year-over-year increase. The company maintains strong fundamentals with a healthy current ratio of 1.78 and impressive gross margins of 71%.
Weiser pointed out that e.l.f. Beauty will soon be facing much easier prior-year POS comparisons, which were below 35%, potentially allowing for growth acceleration in the next month. Nevertheless, she remarked that the company’s recent new product releases appear to be more iterative updates rather than entirely new concepts, which could impact the brand’s ability to drive significant sales growth.
The $170 price target set by DA Davidson is currently under review and will be reassessed after e.l.f. Beauty releases its earnings report. The target is based on a multiple of 26 times the firm’s estimated calendar year 2026 EBITDA of $375 million. Investors and stakeholders now await the company’s earnings report later this week to gauge its performance and future outlook.
In other recent news, e.l.f. Beauty has seen a flurry of analyst activity. Canaccord Genuity adjusted their financial outlook for the company, reducing the price target to $174 while retaining a Buy rating. The firm’s analysis indicates a slowdown in the company’s sales momentum, particularly in the U.S. market. However, the company continues to outperform the broader industry, with Canaccord estimating a 21.4% year-over-year sales increase for the third quarter of 2025 and an adjusted earnings per share of $0.77.
TD Cowen maintained a Buy rating on e.l.f. Beauty but reduced the price target from $150.00 to $130.00, following an analysis of recent sales data and market trends. Despite a recent downturn, the firm anticipates third-quarter sales growth for e.l.f. Beauty to be above the market expectation of 22%, predicting a 23% increase.
DA Davidson reaffirmed a Buy rating on e.l.f. Beauty with a steady price target of $170.00, observing a slower growth rate for the last two weeks ending January 11, 2025, but expressing confidence in the company’s performance potential.
Morgan Stanley (NYSE:MS) upgraded its rating on e.l.f. Beauty shares from Equal-weight to Overweight and increased the price target to $153 from $139, seeing a more attractive valuation for the company. The firm highlights the potential for near-term revenue and EBITDA growth, driven by robust market share gains, strong international growth, and expansion opportunities for the Naturium business.
These are the recent developments for e.l.f. Beauty, as reported by various financial analysts.
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