E.l.f. Beauty (ELF +4.40%) took the cosmetics industry by storm when it debuted as a trendy, low-cost brand, and it has risen to the top of the industry over the past few years. However, the company has undergone some recent challenges, and its stock is falling.
Let's see what's happening and how the stock has performed at different intervals.
What's happening at e.l.f.
E.l.f. continues to grow and gain market share, but it's operating in a tough environment. Not only is overall discretionary spending down, which affects e.l.f.'s performance organically, but with 80% of its products produced in China, it's highly affected by tariffs.
Image source: Getty Images.
There's still good news, but there's also bad news. The good news is that since e.l.f.'s products are lower-cost, customers who are switching down from premium brands might be discovering e.l.f.
The company is still reporting sales growth at a time when much of the industry is under severe pressure, and it's gaining market share in multiple categories. It's guiding for full-year growth of 18% to 20% in the 2026 fiscal year (ending March 30). It's the favorite teen cosmetics brand for the eighth consecutive year, and it's gaining popularity among a multigenerational market.
The bad news is that growth is slowing, costs are increasing, and e.l.f.'s margins are eroding. Earnings per share (EPS) fell from $0.33 last year to $0.05 in the fiscal second quarter (ended Sept. 30). It has raised prices to offset rising costs, and that should be reflected in the coming quarters.
NYSE: ELF
Key Data Points
How e.l.f. stock is doing
E.l.f. stock is down right now, but it beats the market when you zoom out. Here's how it has performed in comparison with the S&P 500 over time.
| Stock/Index | 1-year total returns | 3-year total returns | 5-year total returns |
|---|---|---|---|
| E.l.f. | (45)% | 71% | 216% |
| S&P 500 | 12% | 28% | 99% |
Data source: YCharts data as of Nov. 21, 2025.
E.l.f. has a record of success and a recipe for further success, and most of the issues it's dealing with right now appear to be of a short-term nature. It's a great company with a solid model, loyal fans, and a long-term growth strategy.
Over time, e.l.f. could rebound in a big way and return to beating the market. It's still not quite cheap at today's price, trading at a price-to-earnings ratio of 50. That implies that the market does see it as having strong prospects. It could rebound quickly, but investors should only consider buying it if they see the long-term potential and could hold the stock for many years while the company gets through this current round of volatility.
