At US$114, Is e.l.f. Beauty, Inc. (NYSE:ELF) Worth Looking At Closely?

e.l.f. Beauty, Inc. (NYSE:ELF), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the NYSE. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at e.l.f. Beauty’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for e.l.f. Beauty

Is e.l.f. Beauty Still Cheap?

Good news, investors! e.l.f. Beauty is still a bargain right now. According to my valuation, the intrinsic value for the stock is $147.46, but it is currently trading at US$114 on the share market, meaning that there is still an opportunity to buy now. However, given that e.l.f. Beauty’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of e.l.f. Beauty look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. e.l.f. Beauty's earnings over the next few years are expected to increase by 28%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since ELF is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on ELF for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ELF. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

If you want to dive deeper into e.l.f. Beauty, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for e.l.f. Beauty you should know about.

If you are no longer interested in e.l.f. Beauty, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.