Update: e.l.f. Beauty (NYSE:ELF) Stock Gained 13% In The Last Year

On average, over time, stock markets tend to rise higher. This makes investing attractive. But not every stock you buy will perform as well as the overall market. Over the last year the e.l.f. Beauty, Inc. (NYSE:ELF) share price is up 13%, but that's less than the broader market return. Unfortunately the longer term returns are not so good, with the stock falling 4.6% in the last three years.

Check out our latest analysis for e.l.f. Beauty

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

e.l.f. Beauty went from making a loss to reporting a profit, in the last year.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

We think that the revenue growth of 7.2% could have some investors interested. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for e.l.f. Beauty in this interactive graph of future profit estimates.

A Different Perspective

e.l.f. Beauty shareholders are up 13% for the year. While you don't go broke making a profit, this return was actually lower than the average market return of about 19%. The silver lining is that the recent rise is far preferable to the annual loss of 1.5% that shareholders have suffered over the last three years. We hope the turnaround in fortunes continues. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 3 warning signs for e.l.f. Beauty that you should be aware of before investing here.

e.l.f. Beauty is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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