On Thursday, Piper Sandler, a financial services firm, increased its stock price target for e.l.f. Beauty (NYSE:NYSE:ELF) shares to $258 from the previous target of $210, while retaining an Overweight rating on the stock. The firm's analyst highlighted e.l.f. Beauty as a top pick, both for the upcoming earnings report and for the rest of the year.
The analyst anticipates that the current share price reflects an expected growth of about 25%, which aligns with recent scanner data, and an additional 10-15% growth from Naturium's contribution. These expectations are slightly above the consensus but are believed to be lower than the final numbers. The firm suggests that there is a significant upside potential that is not yet tracked, especially from international and digital channels, as e.l.f. Beauty expands into new markets.
Piper Sandler also noted that e.l.f. Beauty's management has effectively communicated its spending strategies for the year, aiming for a more balanced approach rather than a back-end loaded one. However, the firm advised caution regarding margins in the upcoming first-quarter earnings report.
Despite these concerns, the analyst expects the company's earnings per share (EPS) to surpass expectations and believes it is likely that management will increase its full-year guidance.
The financial services firm acknowledges the current high valuation of e.l.f. Beauty's shares but maintains that there is still considerable room for share price appreciation. This confidence is based on the expectation of consistent overperformance and subsequent upward revisions to financial forecasts. Piper Sandler encourages investors to continue adding to their positions or to start building new ones in e.l.f. Beauty.
In other recent news, e.l.f. Beauty has been the subject of various analyst reports. Piper Sandler reiterated an Overweight rating on e.l.f. Beauty shares, emphasizing the company's transition from the Russell 2000 to the Russell 1000 index as a significant event.
Canaccord Genuity (TSX:CF) raised its price target for e.l.f. Beauty shares to $250, maintaining a Buy rating, following the company's robust sales data and expansion plans. The firm also noted e.l.f. Beauty's Naturium brand's expansion into Ulta Beauty (NASDAQ:ULTA) stores as an opportunity for growth.
Truist Securities increased the stock's price target from $200 to $210 while sustaining a Buy rating, based on updated forecasts for the company's sales and adjusted EBITDA for fiscal years 2025 and 2026. TD (TSX:TD) Cowen retained its Buy rating and $190 stock price target for e.l.f. Beauty, citing the company's exceptional growth and potential for increased market presence.
DA Davidson added e.l.f. Beauty to its 'Best-of-Breed Bison' list, maintaining a Buy rating with a $220 price target, acknowledging the company's financial strength. These developments highlight the recent positive analyst sentiment towards e.l.f. Beauty's growth and financial performance.
InvestingPro Insights
Piper Sandler's upbeat outlook for e.l.f. Beauty (NYSE:ELF) is complemented by some compelling metrics and insights from InvestingPro. With a robust revenue growth of 76.89% over the last twelve months as of Q4 2024, e.l.f. Beauty is showing a strong expansion in its financials.
This is underscored by a Gross Profit Margin of 70.72%, indicating that the company is maintaining profitability as it grows. Moreover, the company has enjoyed a significant 75.75% return over the past year, suggesting that investors have been rewarding its performance.
InvestingPro Tips further enrich this analysis, noting that analysts are predicting sales growth in the current year and that e.l.f. Beauty operates with a healthy balance sheet, where liquid assets exceed short-term obligations. These factors, combined with the company's impressive gross profit margins, paint a picture of a financially sound and growing company.
Investors interested in a deeper dive into e.l.f. Beauty's financial health and potential can access additional insights. There are 18 more InvestingPro Tips available for e.l.f. Beauty, which can be found at https://www.investing.com/pro/ELF. For those looking to subscribe, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. These additional tips can provide a more nuanced understanding of the company's valuation metrics, such as its P/E ratio of 85.57 and Price/Book ratio of 17.73, which, when considered with the company's growth, could inform investment decisions.
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