Shares of e.l.f. Beauty (ELF, Financial) experienced a significant drop of 11.97% over the past week. The decline is largely attributed to the company's updated guidance for sales growth of 25% to 27% in 2025, a notable decrease from the impressive 77% growth reported in the previous year. This sharp deceleration in growth has naturally sparked concerns among investors.
Adding fuel to the fire, consumer goods data from SPINS and IRI revealed a slowdown in credit card spending growth with e.l.f. Beauty, which was down to 18% for the four weeks ending August 11. This trend further indicates that the company may continue to face challenges in maintaining its historical growth rates.
In light of these recent developments, let's delve deeper into the stock analysis and valuation of e.l.f. Beauty.
As of the latest data, e.l.f. Beauty's stock is priced at $150.2 with a market capitalization of $8.47 billion. The stock's Price-to-Earnings (P/E) ratio stands at 71.52, suggesting that the stock is priced relatively high compared to its earnings. The company has a Price-to-Book (P/B) ratio of 12.04 and a Price-to-Sales (P/S) ratio of 7.78, which is close to its 1-year low of 7.06.
On the financial strength front, e.l.f. Beauty boasts strong indicators such as an Altman Z-Score of 11.49 and a robust financial strength ranking. However, there are cautionary signs, including a Beneish M-Score indicating potential manipulation of financial results and a Sloan Ratio that highlights poor quality of earnings.
Despite these issues, the company has positive attributes like a strong return on investment capital (ROIC) of 18.98% and a healthy gross margin of 70.92%. Additionally, e.l.f. Beauty's GF Value stands at $160.58, suggesting that the stock is fairly valued at its current price. For more detailed valuation metrics, you can visit the GF Value page.
While the recent slowdown in growth and consumer spending has undoubtedly impacted investor sentiment, e.l.f. Beauty remains a company with strong fundamentals and financial health. Investors should closely monitor future earnings reports and market developments to make informed decisions regarding their positions in ELF stock.
