Elf Stock Analysis (10X Potential)

Added: 2026-05-28

[00:00:00]ELF Beauty stock reported earnings this week and despite beating both on EPS and on revenue, the stock fell almost 7% in the past 5 days. This brand has become extremely popular in the past couple of years. Last quarter, they reported 25% growth in net sales and 13% growth in adjusted EBITDA. Moreover, the 29th consecutive quarter of net sales growth and also they are expanding internationally. Their revenue has grown in the past 5 years from $318 million to $1.6 billion today. Where they have also seen some good growth is in their profit. Their free cash flow has improved from $23 million to $190 million today and they have very good margins. They are expecting profit to increase significantly in the upcoming years. They have a very good balance sheet as they have $290 on cash on hand. With this, they are returning value to shareholders through share repurchases. Last quarter, they repurchased $50 million worth of shares and they still have $400 remaining. But now let's get into some negatives. The 2027 outlook that they gave was very weak, only expecting 12 to 14% net sales growth when this company is usually growing at 20 plus percentage. Moreover, they said they were expecting a $20 million hit from the iron war and also there is a lot of competition in the beauty space. So now, in order to calculate the intrinsic value of the company, as you can see, I have intrinsic value between $36 per share and $109 per share. Which as far as returns mean that if my lower assumptions occur, you would get about a 3% annual return on your money, middle 14% and high 24%. So solid returns according to my middle and high assumptions. And I now believe that ELF is actually discounted. However, I still don't believe it's a screaming buy. And because this stock is so volatile, I think I'm going to get it for cheaper in the future, but I'm very interested in this company because the market cap is only $3 billion and therefore it is a small company, which means the growth potential is still huge.