Stock Story -
What Happened: Shares of cosmetics company e.l.f. Beauty (NYSE:ELF) jumped 22% in the afternoon session after the company reported first-quarter earnings results. e.l.f. blew past analysts' EPS expectations. Its revenue (up 71% y/y) also outperformed Wall Street's estimates, driven by higher unit volumes and mix. In FY'24, the company surpassed the milestone of $1B in annual sales.
On the other hand, its operating margin missed analysts' expectations, and its full-year revenue and earnings guidance missed Wall Street's estimates. The company provided conservative guidance partly due to concerns about macro uncertainty, with the FY'25 sales forecast pointing to a significant growth deceleration and implying 21.1% growth (vs. 77.2% in FY2024).
Overall, this was a mixed yet decent quarter for e.l.f.
Is now the time to buy e.l.f.? Find out by reading the original article on StockStory, it's free.
What is the market telling us: e.l.f.'s shares are not very volatile than the market average and over the last year have had only 27 moves greater than 5%. Moves this big are very rare for e.l.f. and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 4 months ago, when the company dropped 7.8% on the news that Morgan Stanley (NYSE:MS) analyst Dara Mohsenian downgraded the stock's rating from Overweight (Buy) to Equal Weight (Hold). The analyst added, "With the stock nearly tripling since early 2023 and up 10x since the beginning of 2020, the Bull-Bear skew is now slightly negative, which is rare for this growth stock, and we believe valuation reflects outsized growth in the business."
e.l.f. is up 36.6% since the beginning of the year, but at $190.86 per share it is still trading 12.2% below its 52-week high of $217.40 from February 2024. Investors who bought $1,000 worth of e.l.f.'s shares 5 years ago would now be looking at an investment worth $16,504.
