ELF Should I Buy
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Elf Beauty Inc. (ELF) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The company's strong financial performance, expanding market share, and positive growth outlook outweigh the minor risks. Despite no immediate trading signals, the stock's fundamentals and analyst sentiment support a buy decision.
The MACD is positive and expanding, indicating bullish momentum. The RSI is neutral at 71.448, and moving averages are converging, suggesting no clear overbought or oversold conditions. The stock is trading near its resistance level of 91.257, which aligns with its recent price movements.
Elf Beauty is expanding its market share at double the rate of competitors, driven by strong demand for its low-priced products and the successful integration of the Rhode brand. The company expects a 22% sales increase for fiscal 2026 and has raised FY26 guidance. Analysts maintain a generally positive outlook with price targets above the current trading price.
Gross margin has slightly declined YoY, and tariffs have impacted profitability. Analysts note that growth may normalize to lower levels in the second half of the fiscal year, potentially keeping the stock range-bound in the near term.
In Q3 2026, revenue increased by 37.76% YoY to $489.51M, net income rose by 128.12% YoY to $39.38M, and EPS grew by 116.67% YoY to $0.65. However, gross margin dropped slightly to 70.99%, down 0.42% YoY.
Analysts are generally positive, with multiple firms maintaining Buy or Outperform ratings. Recent price target updates range from $92 to $115, indicating upside potential from the current price. However, some analysts note potential near-term range-bound trading as growth normalizes.
