Price: $129.48
Willing To Pay: $120
I like ELF a lot, I do not think it is a stock I would currently buy right now; but that is just because I believe the price it is at right now I could not create as large returns by buying into it right now as I could in some other places. However it is a stock I will be holding for the foreseeable future. Especially with their acquisition of Rhode, not necessarily because of the revenue it will generate; but more so because of the brand/reputation they have acquired, especially with how Hailey Bieber will now work to help promote ELF. ELF's 5 YR Revenue CAGR is at 30.80% with revenue consistently increasing yoy since 2014. Along with that they have a 5 yr Gross Profit Ratio of 66.24% with it currently being 70.72%. Along with the projection I ran their PE at 25 even though their TTM is 41.72 and their 5 yr average is 82.33. Overall I feel like they still have a lot of growth; I don't know if it will keep all the momentum that they have, but I do see them hitting the price target of $152.71 within honestly the next 2 years and would not be surprised at all if within 2-3 years it is in the $300's. Along with that the beauty industry is a 700 Billion dollar business in projections in 2025 and continues to grow, and believe will continue to grow.
For ELF to remain a good investment these are the prices I will need it to hit with the price of $129 of today. Taking into consideration also that there are 56.33 million outstanding shares; and the beauty industry roughly being a $700 Billion business.
1 Year: $155.37 (8.75 Billion market cap)
3 Years: $233.72 (12.6 Billion market cap)
5 Years: $322.15 (18.14 Billion market cap)
10 Years: $801.58 (45.15 Billion market cap)
ROTA: 22.68%
ROE: 19.87%
Current Ratio: 159.50%
Gross Profit Ratio: 70.72%
Net Income Ratio: 12.47%
ROIC: 14.46%
Revenue/Share: $18.70
Net Income/Share: $2.33
Cash/Share: $1.98
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Disclaimer
The user Zwfis has a position in NYSE:ELF. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
