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On Thursday, Raymond (NSE:RYMD) James made a positive adjustment to e.l.f. Beauty’s (NYSE:ELF) financial outlook, increasing the price target from $95.00 to $105.00, while reiterating a Strong Buy rating. The company, currently valued at $5.1 billion, maintains a "GREAT" financial health score according to InvestingPro analysis, with strong liquidity indicated by a 1.9 current ratio. The revision follows e.l.f. Beauty’s fourth-quarter earnings report, which revealed earnings per share (EPS) of $0.78, surpassing Raymond James’ estimate of $0.71 and the consensus estimate of $0.73. The company’s sales grew by 4% year-over-year, with a 1% increase in the U.S. and a notable 19% rise internationally. This growth exceeded the Raymond James and consensus estimates, which projected a 2% increase.
The company’s performance was attributed to market share gains and the recent expansion into Belgium and The Netherlands. e.l.f. Beauty also announced plans to enter the Polish market in the fall. The company’s impressive 46.27% revenue growth and industry-leading gross margin of 71.11% support this expansion strategy. Despite these positive developments and a planned price increase, the company refrained from providing a financial outlook for FY26, citing the uncertain impact of fluctuating tariff rates.
Raymond James analyst Olivia Tong expressed surprise at the lack of guidance given e.l.f. Beauty’s sales confidence for the first quarter, its strong value proposition, minimal pushback on pricing, and efforts to diversify sourcing. Although China tariff rates have been reduced to 30%, the company did acknowledge an approximate $50 million annualized impact if tariffs remain at this increased level. Tong noted that many questions during the earnings call went unanswered, leading to some disappointment.
Nevertheless, Raymond James remains confident in e.l.f. Beauty’s potential, maintaining their Strong Buy rating despite the prospect of volatile near-term margins due to tariffs. The analyst firm has adjusted its margin assumptions but left its estimates unchanged, citing the known tariff headwinds, a solid start to the fiscal year, and the anticipation of further market expansions. For deeper insights into e.l.f. Beauty’s valuation and growth prospects, investors can access comprehensive analysis and 18 additional ProTips through InvestingPro’s detailed research report, one of 1,400+ available company deep-dives.
In other recent news, e.l.f. Beauty reported impressive fiscal fourth-quarter results for 2025, with earnings per share reaching $0.78, surpassing the forecast of $0.73. The company’s revenue also exceeded expectations, totaling $332.6 million compared to the anticipated $327.99 million. Goldman Sachs maintained its Buy rating on e.l.f. Beauty, setting a price target of $120, following these strong earnings results. Additionally, e.l.f. Beauty announced a strategic acquisition of the prestige beauty brand Rhode, founded by Hailey Bieber, for $1 billion, including a potential $200 million earnout. This acquisition is expected to enhance e.l.f. Beauty’s presence in the skincare segment and diversify its consumer base.
Despite the positive earnings news, e.l.f. Beauty faces challenges due to elevated tariff rates on imports from China, which could impact gross margins in the first quarter. The company plans to mitigate this by implementing a price increase across its product lineup starting in August 2026. Analysts, such as those from Goldman Sachs, have adjusted their projections in light of these factors, raising top-line estimates but reducing EPS forecasts for fiscal years 2026 to 2028. e.l.f. Beauty has also demonstrated robust international growth, with a 28% increase in net sales and a 26% rise in adjusted EBITDA for fiscal 2025.
The company’s acquisition of Rhode is seen as a significant opportunity to leverage e.l.f. Beauty’s marketing and retail capabilities to expand Rhode’s brand awareness and retail distribution. Rhode has achieved $212 million in net sales within three years, indicating strong consumer demand. e.l.f. Beauty’s management expressed optimism about the potential for continued growth, driven by product category expansion and increased market penetration, despite uncertainties related to tariffs.
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