Please ensure Javascript is enabled for purposes of website accessibility

e.l.f. Beauty Rises on Strong Fourth-Quarter Sales, Wins Thumbs-Up From J.P. Morgan

By Rhian Hunt - Updated May 22, 2020 at 11:29AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Some analysts appear to agree with e.l.f.’s “ElfingAmazing” hashtag.

A manufacturer of affordable cosmetics and skincare products, e.l.f. Beauty, Inc. (ELF -0.20%) posted some glamorous results with its latest quarterly and 12-month outcomes, reporting a 13% boost of net sales for its fiscal fourth quarter, ended March 31. This year, the company also generated positive net income, a notable change from fiscal 2019's net loss.

e.l.f.'s non-GAAP earnings per share (EPS) and its revenue beat analyst consensus estimates. Adjusted net income grew by 65.6% to $5.3 million, delivering $0.10 EPS and beating analyst estimates by $0.05. The company reports the 13% year-over-year rise in quarterly net sales was "primarily driven by increased productivity across our retail and e-commerce channels."

Various cosmetics and a make up brush.

Image source: Getty Images.

For the whole of fiscal 2020, net income under generally accepted accounting principles (GAAP) was $17.9 million, up from fiscal 2019's $3.1 million net loss. Adjusted net income declined slightly, from $32.7 million and $0.67 EPS for 2019 to $32.2 million and $0.63 EPS in 2020.

Following the release, J.P. Morgan analyst Andrea Teixeira boosted the December price target for e.l.f. Beauty from $13, below its current share price, to $17. In a research note, she remarked that the company's low-cost cosmetics and personal care items are especially attractive during the economic downturn caused by the coronavirus.

Teixeira singled out e.l.f.'s Poreless Putty Primer as an example of an e.l.f. "hero product," selling vigorously at $8 compared to "prestige" equivalents with prices 375% to 625% higher.

Shares of e.l.f. Beauty are up in morning trading, currently tracking toward $16 per share with over 9% gains.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

e.l.f. Beauty Stock Quote
e.l.f. Beauty
$30.62 (-0.20%) $0.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.