e.l.f. Beauty Faces Decline Amid Earnings Pressure

e.l.f. Beauty is experiencing a stock decline of 24.43% over the past month, contrasting with sector gains. The company anticipates a significant EPS drop, raising investor caution ahead of its earnings report.

Date: 03-10-2024

AI Rating: 4

According to the report, e.l.f. Beauty (Ticker: ELF) closed at $105.62, showing a small daily decline of -0.33%. This performance is noticeably weaker than the broader market, as the S&P 500 gained 0.01%, and both the Dow and Nasdaq registered minimal increases.

The company has seen its shares drop 24.43% over the past month, while the Consumer Staples sector experienced a gain of 0.53% and the S&P 500's gain was 1.21%. This context suggests that e.l.f. Beauty is struggling compared to its peers.

Investor attention is shifting to the upcoming earnings report, with analysts estimating an earnings per share (EPS) of $0.47, which indicates a significant year-over-year decline of 42.68%. In contrast, the expected quarterly revenue of $291.3 million represents a robust growth of 35.17% compared to the prior year.

For the full year, the Zacks Consensus Estimates predict earnings of $3.53 per share and revenue of $1.32 billion. These figures indicate a respective growth of +11.01% for EPS and +29.18% for revenue compared to the previous year.

The report notes a slight deterioration in analyst estimates, with the Zacks Consensus EPS estimate recently moving down by 0.01% within the past month. e.l.f. Beauty currently holds a Zacks Rank #3 (Hold), which reflects a neutral outlook.

In terms of valuation, e.l.f. Beauty is trading at a Forward P/E ratio of 29.99, which is a premium compared to its industry average of 26.56. The company also has a PEG ratio of 1.8, which is higher than the industry's average PEG ratio of 1.47.

These valuations suggest that e.l.f. Beauty might be overvalued given its current EPS outlook. The Cosmetics industry is struggling as a whole and currently ranks in the bottom 37% of Zacks Industry Ranks, further indicating potential challenges ahead.

Stocks: ELF