e.l.f. Beauty, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

August 06, 2022
  •  Updated
October 01, 2022
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As you might know, e.l.f. Beauty, Inc. (NYSE:ELF) just kicked off its latest first-quarter results with some very strong numbers. e.l.f. Beauty delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$123m, some 12% above indicated. Statutory EPS were US$0.27, an impressive 47% ahead of forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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

NYSE:ELF Earnings and Revenue Growth August 6th 2022

Taking into account the latest results, the current consensus from e.l.f. Beauty's eleven analysts is for revenues of US$457.7m in 2023, which would reflect a meaningful 9.6% increase on its sales over the past 12 months. Per-share earnings are expected to grow 13% to US$0.60. In the lead-up to this report, the analysts had been modelling revenues of US$441.5m and earnings per share (EPS) of US$0.56 in 2023. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 12% to US$38.67per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on e.l.f. Beauty, with the most bullish analyst valuing it at US$44.00 and the most bearish at US$35.00 per share. This is a very narrow spread of estimates, implying either that e.l.f. Beauty is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the e.l.f. Beauty's past performance and to peers in the same industry. The analysts are definitely expecting e.l.f. Beauty's growth to accelerate, with the forecast 13% annualised growth to the end of 2023 ranking favourably alongside historical growth of 9.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.4% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect e.l.f. Beauty to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around e.l.f. Beauty's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on e.l.f. Beauty. Long-term earnings power is much more important than next year's profits. We have forecasts for e.l.f. Beauty going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for e.l.f. Beauty that you should be aware of.

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