ELF Stock Risk & Deep Value Analysis
elf Beauty Inc
Consumer Defensive • Household & Personal Products
DVR Score
out of 10
What You Need to Know About ELF Stock
We analyzed elf Beauty Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran ELF through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Aggressive. Here's what we found.
ELF Risk Analysis & Red Flags
What Could Go Wrong
The securities fraud lawsuit, alleging false statements and insider selling, could result in substantial financial penalties and reputational damage. If the allegations are proven, it could lead to a loss of investor confidence, a significant stock price decline, and divert management focus and capital from growth initiatives.
Risk Matrix
Overall
Aggressive
Financial
High
Market
Medium
Competitive
Medium
Execution
High
Regulatory
High
Red Flags
- ⚠
Advancing securities fraud lawsuit alleging false financial reporting (Feb 2024-Feb 2025)
- ⚠
CEO Tarang Amin sold 35% of his stake ($3.31M) in the last 90 days, flagged in the context of the lawsuit
- ⚠
LTM operating margin declining from 15% to 11.5%
- ⚠
Q4 FY2026 consensus EPS projecting a 61.54% YoY decline, despite revenue growth
- ⚠
Valuation at a premium (Forward P/E 21.17x vs sector median 14.81x) amidst significant legal and profitability concerns
Upcoming Risk Events
- 📅
Unfavorable legal rulings or settlements in the securities fraud lawsuit
- 📅
Significant miss on Q4 FY2026 EPS or revenue guidance
When to Reconsider
- 🚪
Exit if the securities fraud lawsuit receives an adverse ruling or settlement exceeding current market expectations
- 🚪
Sell if Q4 FY2026 earnings or subsequent guidance show continued, unaddressed margin compression and EPS decline
- 🚪
Exit if revenue growth decelerates significantly below current consensus projections (below 20% YoY)
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What Does elf Beauty Inc (ELF) Do?
Market Cap
$3.96B
Sector
Consumer Defensive
Industry
Household & Personal Products
Employees
633
e.l.f. Beauty, Inc., a beauty company, provides cosmetics and skin care products worldwide. The company offers eye, lip, face, paw, and skin care products. It offers products under the e.l.f. Cosmetics, e.l.f. Skin, Well People, Naturium, and Keys Soulcare brand names. The company sells its products through national and international retailer and direct-to-consumer through its e-commerce channel. e.l.f. Beauty, Inc. was formerly known as J.A. Cosmetics Holdings, Inc. and changed its name to e.l.f. Beauty, Inc. in April 2016. The company was founded in 2004 and is headquartered in Oakland, California.
Visit elf Beauty Inc WebsiteInvestment Thesis
e.l.f. Beauty is a high-growth disruptor in the beauty industry, leveraging a digital-first, multi-brand strategy to consistently gain market share among value-conscious consumers. Despite strong underlying business momentum, an advancing securities fraud lawsuit and profitability concerns introduce significant short-term and medium-term risk. The investment thesis hinges on the company's ability to navigate these legal challenges without fundamental business erosion and demonstrate renewed margin expansion.
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ELF Price Targets & Strategy
12-Month Target
$83.97
Bull Case
$108.85
Bear Case
$46.06
Valuation Basis
Based on 27x forward P/E applied to FY2026 consensus EPS of $3.11.
Entry Strategy
Consider dollar-cost averaging near current levels ($65-$70) if legal risks show signs of de-escalation; monitor for support around the $60 mark.
Exit Strategy
Take profit on significant rallies above $95, set a stop loss around $55 if legal concerns intensify or profitability deteriorates further.
Portfolio Allocation
3% for aggressive risk tolerance, given high growth potential offset by significant legal and profitability risks.
Price Targets & Strategy
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Is ELF Financially Healthy?
Valuation
P/E Ratio
38.06
Forward P/E
18.33
EV/EBITDA
44.13
PEG Ratio
2.47
Price/Book
8.27
Price/Sales
3.90
Profitability
Gross Margin
70.27%
Operating Margin
11.03%
Net Margin
6.84%
Return on Equity
10.75%
Revenue Growth
16.73%
EPS
$1.77
Balance Sheet
Current Ratio
3.05
Quick Ratio
1.55
Debt/Equity
0.34
Total Debt
$831.60M
Cash & Equivalents
$194.40M
Cash Flow
Operating Cash Flow
$200.94M
Free Cash Flow
-$12.60M
EBITDA
$202.69M
Other
Beta (Volatility)
1.80
Does ELF Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Expanding
Moat Sources
3 Identified
The moat is strengthening through continued brand building, social media engagement, and a focus on affordable yet high-quality products. Its multi-brand strategy further diversifies and solidifies its market position.
Moat Erosion Risks
- •Rapidly changing consumer tastes and beauty trends, requiring constant innovation
- •Intense competition from both established players and new direct-to-consumer brands
- •Reputational damage from legal issues could erode brand trust
ELF Competitive Moat Analysis
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ELF Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral with increasing caution, as the core brand is popular but legal news could spread.
Institutional Sentiment
Mixed but broadly positive with recent downgrades (JPMorgan, Citi, BofA), still a 'Moderate Buy' consensus but with reduced price targets.
Insider Activity (Form 4)
CEO Tarang Amin sold 52,880 shares for $3.31 million (35% stake reduction) under a Rule 10b5-1 plan, noted in the context of the securities fraud lawsuit.
Options Flow
Normal options activity; no specific unusual activity indicating institutional positioning was identified in the provided research.
Earnings Intelligence
Next Earnings
2026-05-27
Surprise Probability
Medium
Historical Earnings Pattern
Historically, e.l.f. Beauty has often beaten revenue and EPS estimates (Q3 FY2026 example), leading to positive stock reactions. However, future reactions may be more sensitive to guidance and legal developments given the current context.
Key Metrics to Watch
Competitive Position
Top Competitor
Estée Lauder (EL)
Market Share Trend
Gaining significant market share with 28 consecutive quarters of net sales growth, outpacing many legacy brands.
Valuation vs Peers
Trading at a premium to the sector median on a forward P/E basis (21.17x vs 14.81x), which may be challenged given legal and profitability concerns.
Competitive Advantages
- •Digital-first, multi-brand strategy (e.l.f. Cosmetics, Keys Soulcare, Clean Beauty, Rhode)
- •Strong brand equity and loyalty among younger, value-conscious consumers
- •Agile product development and trend responsiveness
- •Efficient distribution network through mass retailers and e-commerce
Market Intelligence
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What Could Drive ELF Stock Higher?
Near-Term (0-6 months)
- •Q4 FY2026 Earnings report on May 27, 2026
- •Updates or developments regarding the securities fraud lawsuit
Medium-Term (6-18 months)
- •Continued market share gains and brand expansion (e.g., Keys Soulcare, Rhode integration)
- •Potential new product launches or category expansions
Long-Term (18+ months)
- •Establishment as a dominant, digitally-native beauty conglomerate
- •Potential international market expansion into underserved regions
Catalysts & Growth Drivers
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What's the Bull Case for ELF?
- ✓
Positive resolution or favorable settlement of the securities fraud lawsuit
- ✓
Reacceleration or stabilization of operating margins
- ✓
Sustained organic revenue growth above 25% YoY
Bull Case Analysis
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Competing with ELF
See how elf Beauty Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
elf Beauty Inc ELF | $4.0B | 5.2 | 38.1 | $1.0B | 6.8% | 16.7% | |
Costco Wholesale Corp COST | — | 0.7 | — | — | — | — | Compare → |
Coca-Cola Co KO | $324.9T | 0.4 | 3.1 | $47.9B | 27.3% | 1.9% | Compare → |
PepsiCo Inc PEP | — | 0.1 | — | — | — | — | Compare → |
Procter & Gamble Co PG | — | 0.2 | — | — | — | — | Compare → |
Walmart Inc WMT | $1.0T | 0.7 | 47.4 | $713.2B | 3.1% | 4.7% | Compare → |
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How elf Beauty Inc Makes Money
e.l.f. Beauty Inc. is a multi-brand beauty company that designs, markets, and sells a wide range of cosmetic, skincare, and fragrance products primarily through its e.l.f. Cosmetics brand, as well as Keys Soulcare, clean beauty, and acquired brands like Rhode. They generate revenue by selling these products directly to consumers via their e-commerce platforms and through a vast network of mass-market retailers and drugstores globally, focusing on affordability, trend-driven innovation, and digital engagement to reach a broad customer base.
Read Full Business Model BreakdownFAQ
What is the DVR Score for elf Beauty Inc (ELF)?
As of April 22, 2026, elf Beauty Inc has a DVR Score of 5.2 out of 10, placing it in the "Proceed with Caution" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of elf Beauty Inc?
elf Beauty Inc's market capitalization is approximately $4.0B. The company operates in the Consumer Defensive sector within the Household & Personal Products industry.
What ticker symbol does elf Beauty Inc use?
ELF is the ticker symbol for elf Beauty Inc. The company trades on the NYQ.
What is the risk level for ELF stock?
Our analysis rates elf Beauty Inc's overall risk as Aggressive. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of ELF?
elf Beauty Inc currently has a price-to-earnings (P/E) ratio of 38.1. This is above the market average, suggesting the stock may be priced for high growth expectations.
Is elf Beauty Inc's revenue growing?
elf Beauty Inc has reported revenue growth of 16.7%. The company is showing strong top-line momentum.
Is ELF stock profitable?
elf Beauty Inc has a profit margin of 6.8%. The company is profitable but margins are modest.
How often is the ELF DVR analysis updated?
Our AI-powered analysis of elf Beauty Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on April 22, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for ELF (elf Beauty Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.