ELF - e.l.f. Beauty: There Is Further Room For Upside In This Growth Story

2024-06-11 04:56:49 ET

Summary

• e.l.f. Beauty reported strong Q4 FY24 earnings, with revenue and earnings growing 77% and 100% YoY for the full year, exceeding expectations.
• The company continued to gain market share across its Cosmetics and Skincare products given robust product innovation, engaging brand moments and international expansion.
• While it is focused on driving durable product franchises while expanding its digital and retail ecosystems through engaging marketing content, ROI on marketing spend has to be watched carefully.
• Assessing both the “good” and the “bad”, I believe there is plenty of whitespace ahead for market share expansion and given operational excellence thus far, it is a “buy”.

Introduction & Investment Thesis

e.l.f. Beauty ( ELF ) is a multi-brand beauty company that offers premium-quality cosmetics and skincare products at compelling price points compared to its competitors. I initiated a "buy" rating on the stock on April 5th, where my thesis was predicated on my belief that the company is positioned to gain market share in its cosmetics and skincare products, as it drives robust product innovation and buzzworthy marketing to engage and convert users across its digital and retail ecosystems. Since then, the stock has outperformed the S&P 500, growing 11.7%....

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