Last Update 31 Mar 26

Fair value Decreased 1.81%

ELF: Market Share Gains And Raised Sales Outlook Will Support Upside

Analysts have trimmed their average price target on e.l.f. Beauty by about $2. This reflects updated views on slightly softer revenue growth and profit margins, partly offset by a higher assumed future P/E multiple and ongoing mixed signals in recent sales and consumption data.

Analyst Commentary

Recent Street research on e.l.f. Beauty reflects a mix of optimism on brand momentum and concerns around slowing consumption growth and valuation, which helps explain the modest reset in average price targets.

Bullish Takeaways

Bullish analysts highlight that Q4 consumption data through late February is running up 7%, which they see as broadly consistent with the prior quarter and supportive of the current growth profile.
The U.S. mass cosmetics market is described as holding steady in February, up low single digit, with Q4 to date slightly better than Q3, which bullish analysts view as a supportive backdrop for the brand's execution.
Weekly sales commentary points to sales up 17% year over year in the latest reported week, with trends described as accelerating on a two year basis and company share gains improving by 70 basis points over four weeks, which bullish analysts connect to solid brand engagement and distribution.
Some recent rating actions, including a fresh initiation and an assumed Buy rating from different firms, signal that a portion of the Street still sees room for further execution on growth and market share despite the recent pullback in targets.

Bearish Takeaways

Bearish analysts focus on February consumption for e.l.f. Beauty slowing to flat, which they frame as a five point step down from January and a moderation from high single digit levels seen in the U.S. during Q3.
Volume is a key concern, with data indicating volume in the negative mid single digit range since price increases, and dipping to a 10% decline in February, which raises questions about the sustainability of growth if mix and pricing do not fully offset weaker units.
Several firms have trimmed price targets by between $7 and $27, citing softer growth and margin expectations, which bearish analysts link to a need for higher execution to justify prior valuation multiples.
Neutral ratings tied to low single digit consumption growth suggest some on the Street want to see clear acceleration in the core business before getting more constructive on the stock's risk reward tradeoff.

What's in the News

e.l.f. Beauty updated its share repurchase activity, buying back 626,049 shares between October 1, 2025 and December 31, 2025, representing 1.05% of shares for US$49.98 million, and completing a total of 1,587,303 shares repurchased, or 2.76%, for US$100.53 million under the buyback announced on August 27, 2024 (company filing).
The company raised earnings guidance for fiscal 2026, with net sales now expected in a range of US$1.6b to US$1.612b, compared with the previous outlook of US$1.55b to US$1.57b (company guidance).
The updated fiscal 2026 outlook reflects an anticipated 22% to 23% year over year change in net sales, compared with the prior expectation of an 18% to 20% change (company guidance).

Valuation Changes

Fair Value: trimmed slightly from $113.77 to $111.71, reflecting a modest reset in the modeled upside.
Discount Rate: reduced from 7.73% to 7.38%, implying a somewhat lower required return in the updated analysis.
Revenue Growth: revised down from 14.48% to 12.76%, pointing to a more moderate long term topline outlook in the model.
Profit Margin: lowered significantly from 14.43% to 9.36%, indicating a more conservative view on future profitability.
Future P/E: expanded from 33.19x to 46.10x, meaning a higher valuation multiple is now applied to projected earnings.

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Key Takeaways

Rapid expansion into international markets and acquisition strategies are positioning the company for increased growth, diversification, and brand synergy on a global scale.
Strong focus on influencer marketing, digital innovation, and ethical branding is driving efficient customer acquisition, operational scalability, and long-term market share gains.
Heavy reliance on Chinese manufacturing, tariff risks, and competitive pressures threaten margins, revenue growth, and market share if mitigation and expansion strategies fall short.

Catalysts

About e.l.f. Beauty

A beauty company, provides cosmetics and skin care products worldwide.What are the underlying business or industry changes driving this perspective?

The expansion into new international markets and rapid growth in existing ones (e.g., 30% international net sales growth, top rankings in new geographies, global Sephora rollout) provides significant runway for future revenue growth and increased diversification, which is likely under-appreciated by the market.
The company is highly effective at leveraging influencer marketing, social media virality, and community-driven innovation (e.g., TikTok Shop exclusives, rapid launch cadence), enabling lower customer acquisition costs and highly efficient brand-building, supporting both top-line growth and sustainable net margin expansion.
e.l.f.'s acquisition of Rhode (a high-growth DTC brand with low current awareness and untapped distribution) unlocks further growth and brand synergy opportunities, with Rhode's U.S. Sephora rollout and eventual international expansion expected to drive incremental revenue and be accretive to earnings.
Continued investment in digital platforms, ERP/SAP implementation, and supply chain optimization should improve operational efficiencies and support scalable growth, helping to expand EBITDA margins and free cash flow over time.
e.l.f.'s strong, value-driven, cruelty-free, and inclusive brand positioning aligns with rising consumer demand for affordable, clean, and ethical beauty; this should help maintain high customer retention and increase market share, supporting long-term revenue and net income growth.

e.l.f. Beauty Earnings and Revenue Growth

e.l.f. Beauty Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming e.l.f. Beauty's revenue will grow by 12.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 6.8% today to 9.4% in 3 years time.
Analysts expect earnings to reach $204.0 million (and earnings per share of $6.41) by about March 2029, up from $103.9 million today.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 46.1x on those 2029 earnings, up from 33.7x today. This future PE is greater than the current PE for the US Personal Products industry at 20.7x.
Analysts expect the number of shares outstanding to grow by 4.84% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.38%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Heightened exposure to U.S.-China tariffs, with 75% of e.l.f. Beauty's production sourced from China, creates significant gross margin risk and cost volatility; persistent or higher tariffs could materially increase COGS and compress net margins and earnings.
Overreliance on price increases as a tariff mitigation strategy introduces uncertainty around consumer acceptance and elasticity; if price-sensitive shoppers reduce purchase frequency or trade down, it could dampen unit growth and overall revenue.
Ongoing high marketing and SG&A investment, especially following the Rhode acquisition, may outpace incremental top-line gains if revenue synergies or brand expansion do not materialize as quickly as expected, pressuring net margins and earnings.
Intensifying competition in the affordable and clean beauty segment from both emerging indie brands and established players-especially as many plan to raise prices in response to tariffs-could impact e.l.f. Beauty's market share, limit pricing power, and weigh on long-term revenue and gross margins.
Slow or uncertain progress in mitigating supply chain concentration in China, combined with potential regulatory or geopolitical disruptions, could further threaten operational continuity, increase costs, and impact future earnings and free cash flow.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $111.71 for e.l.f. Beauty based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $135.0, and the most bearish reporting a price target of just $85.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $2.2 billion, earnings will come to $204.0 million, and it would be trading on a PE ratio of 46.1x, assuming you use a discount rate of 7.4%.
Given the current share price of $59.35, the analyst price target of $111.71 is 46.9% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) 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 price targets and estimates used are consensus data, and do 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 AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

ELF: Expanding Global Footprint And Sephora Launch Will Drive Future Upside