Need To Know: Analysts Are Much More Bullish On e.l.f. Beauty, Inc. (NYSE:ELF)

Celebrations may be in order for e.l.f. Beauty, Inc. (NYSE:ELF) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. Investors have been pretty optimistic on e.l.f. Beauty too, with the stock up 18% to US$132 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After the upgrade, the 13 analysts covering e.l.f. Beauty are now predicting revenues of US$829m in 2024. If met, this would reflect a sizeable 23% improvement in sales compared to the last 12 months. Per-share earnings are expected to rise 7.0% to US$1.97. Before this latest update, the analysts had been forecasting revenues of US$729m and earnings per share (EPS) of US$1.45 in 2024. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

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

It will come as no surprise to learn that the analysts have increased their price target for e.l.f. Beauty 25% to US$146 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values e.l.f. Beauty at US$164 per share, while the most bearish prices it at US$110. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that e.l.f. Beauty's rate of growth is expected to accelerate meaningfully, with the forecast 32% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 18% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that e.l.f. Beauty is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, e.l.f. Beauty could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for e.l.f. Beauty going out to 2026, and you can see them free on our platform here..

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.