e.l.f. Beauty Acquires Rhode, Unlocking $200 Million Growth Potential
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Market Share Growth: e.l.f. Beauty has successfully captured market share in the mass cosmetics industry through a fast-follower strategy and influencer marketing, particularly leveraging strong distribution networks at Target and Ulta Beauty, driving U.S. consumption growth close to 12%.
- Acquisition Strategy: The recent acquisition of premium skincare brand Rhode, which achieved over $200 million in sales in less than three years, is expected to further drive sales growth through increased distribution and product promotion, especially in LVMH's Sephora stores.
- International Expansion Opportunities: Although e.l.f. is still in the early stages of international expansion, its global growth rate is around 8%, indicating strong international demand, with future potential to enhance market share by increasing shelf space at Walmart.
- Attractive Stock Valuation: With e.l.f. stock down about 40% from its highs, it trades at a forward P/E ratio of 26.5 and a PEG ratio below 0.5, indicating undervaluation; combined with future growth opportunities, now is an excellent time to buy the stock.
Analyst Views on ELF
Wall Street analysts forecast ELF stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ELF is 117.50 USD with a low forecast of 85.00 USD and a high forecast of 136.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
10 Buy
3 Hold
0 Sell
Strong Buy
Current: 93.610
Low
85.00
Averages
117.50
High
136.00
Current: 93.610
Low
85.00
Averages
117.50
High
136.00
About ELF
e.l.f. Beauty, Inc. is a multi-brand beauty company. The Company offers inclusive, accessible, clean, vegan, and cruelty-free cosmetics and skincare products. The Company's family of brands includes e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Well People, Keys Soulcare, and rhode. Its e.l.f. SKIN is an ingredient-focused, dermatologist-developed formulas for every eye, lip and face. The Company operates across beauty categories including eye, lip, and face makeup, beauty tools and accessories, and skincare products. Its color cosmetics and skin care products are broadly sold through food, drug, and mass channels, as well as through department stores and direct and specialty channels. The Company sells its products with retailers in the United States, as well as internationally. It also sells its products online through its own direct e-commerce channels, as well as through other e-commerce Websites.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
