E.l.f. Beauty (ELF) | News Based Sentiment Analysis

• On October 2, 2025, Goldman Sachs maintained a "Buy" recommendation for e.l.f. Beauty, with an average price target of $143.78 per share, representing a potential 5.82% increase from its closing price of $135.87. This suggests continued confidence in the company's growth prospects from a major financial institution.
• Over the last three months, 15 analysts published ratings, resulting in an average 12-month price target of $137.67, a 9.76% increase from the previous average of $125.43 as of October 2, 2025. Several firms, including Goldman Sachs, BofA Securities, and B. Riley Securities, raised their price targets, indicating growing optimism.
• Institutional ownership in e.l.f. Beauty increased by 36 owners (3.93%) to a total of 951 funds or institutions as of October 2, 2025, but total shares owned by institutions decreased by 5.97% to 72,400K shares. While more institutions are investing, some are reducing their holdings, resulting in a net decrease in shares owned.
• Fund sentiment is mixed, with Baillie Gifford decreasing its shareholding by 2.17% to 7,771K shares (13.10% ownership) but increasing portfolio allocation by 66.01% as of October 2, 2025. Simultaneously, SMCWX significantly increased its holdings by 73.42% to 1,891K shares (3.19% ownership), boosting portfolio allocation by a substantial 552.05%.
• Despite positive analyst ratings and institutional interest, projected annual revenue for e.l.f. Beauty is expected to decrease by 50.10% to $670 million as of October 2, 2025, with a projected non-GAAP EPS of $1.77. This revenue decline contrasts with the positive sentiment from analysts and institutional investors.
• E.l.f. Beauty experienced a profit decline of over 30% in Q1 FY2026 compared to the previous year, attributed to new tariffs on Chinese imports as of October 2, 2025. Due to ongoing tariff uncertainties, the company is not providing a full-year 2026 outlook, creating uncertainty for investors.
• However, the company demonstrated strong financial health with a revenue growth rate of 9.02% as of June 30, 2025, a net margin of 9.42%, and gross profit margins of 70.7%. These strong margins and growth rates exceed industry averages, suggesting underlying business strength.
• E.l.f. Beauty is trading at $135.2, significantly below its estimated fair value of $221.94 as of October 2, 2025, suggesting potential undervaluation. Forecasted annual revenue growth of 14.6% is expected to outpace the U.S. market's 9.8%, and earnings are projected to rise by nearly 25% per year.

The Investment Story: October 2025 presented a mixed bag for e.l.f. Beauty, with strong analyst support and institutional interest offset by projected revenue declines and tariff-related uncertainties. Despite these challenges, the company maintains strong margins and appears undervalued based on forecasted growth.

What It Means for Investors: The mixed signals suggest a potentially attractive entry point for long-term investors, but also highlight significant risks related to tariffs and revenue projections. Investors should closely monitor tariff developments and the company's ability to navigate these challenges.

Looking Ahead: Investors should watch for updates on tariff impacts and any revisions to the full-year 2026 outlook. The performance of the Rhode brand, acquired in May 2025, will also be a key indicator of future growth.

The Bottom Line: E.l.f. Beauty remains a compelling, albeit complex, investment opportunity. While short-term headwinds exist, the company's strong fundamentals, positive analyst sentiment, and potential undervaluation suggest long-term growth potential, but investors should proceed with caution and monitor key risk factors.