Key Takeaways:
- e.l.f. Beauty is executing a comprehensive growth strategy across color cosmetics, skincare, and international markets while successfully integrating the transformative Rhode acquisition.
- ELF stock could reasonably reach $171/share by the end of 2028, based on our valuation assumptions.
- This implies a total return of 37% from today’s price of $125/share, with an annualized return of 13% over the next 2.6 years.
e.l.f. Beauty (ELF) is setting new benchmarks in the accessible beauty industry through strategic market share expansion and value-driven innovation across its comprehensive portfolio of cosmetics and skincare products.
It combines industry-leading growth momentum with disciplined execution while navigating tariff headwinds and competitive dynamics.
e.l.f. Beauty serves diverse customer segments through its integrated platform spanning accessible cosmetics, premium skincare, and international expansion opportunities globally.
Core offerings include e.l.f. Cosmetics value products, e.l.f. SKIN and Naturium skincare brands, and the recently acquired Rhode premium skincare line, founded by Hailey Bieber.
The beauty leader delivered Q1 net sales of $354 million, growing 9% year-over-year on top of 50% growth in the prior year, with adjusted EBITDA of $87 million, up 12%. It achieved 210 basis points of market share gains, marking its 26th consecutive quarter of both sales growth and share expansion.
ELF maintains the #1 unit share position in color cosmetics, with an approximately 15% share, and the #2 dollar share position, with a 13% share, more than doubling its position from three years ago. International sales increased by 30% as the company expanded into new retail partnerships.
e.l.f. Beauty’s strategic transformation focuses on accessible innovation while building premium capabilities through the acquisition of Rhode for $800 million.
Here’s why ELF stock could deliver solid returns through 2028 as it captures market share opportunities while scaling strategic transformation initiatives across its diversified beauty portfolio.
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What the Model Says for ELF Stock
We analyzed the upside potential for e.l.f. Beauty stock, using valuation assumptions based on its market expansion capabilities and growth opportunities across accessible beauty and premium skincare markets.
Analysts recognize an opportunity ahead for ELF stock, given its proven execution track record, market share momentum, and systematic approach to building competitive advantages while maintaining value positioning and leadership in innovation.
e.l.f. Beauty’s diversified growth strategy provides multiple expansion vectors, while its operational focus validates that disciplined execution can drive margin resilience and improve market penetration in the competitive beauty landscape.
Based on estimates of 20% annual revenue growth, 19% operating margins, and a normalized P/E valuation multiple of 28x, the model projects e.l.f. Beauty stock could rise from $125/share to $171/share.
That would be a 37% total return, or a 13% annualized return over the next 2.6 years.
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for ELF stock:
1. Revenue Growth: 10%
e.l.f. Beauty delivered a strong fiscal Q1 performance, achieving 9% growth despite challenging comparisons and macroeconomic headwinds.
The Rhode acquisition presents growth potential, with $212 million in annual revenue generated from just 10 products, indicating exceptional expansion opportunities.
Growth drivers include continued market share gains in color cosmetics and the expansion of the skincare portfolio.
e.l.f. Beauty expects momentum from Rhode’s Sephora launch, international retail partnerships including Gulf Cooperation Council markets, and a continued innovation pipeline across multiple brands and price points.
We used a 20% forecast reflecting e.l.f. Beauty’s proven growth trajectory, while acknowledging tariff headwinds and competitive dynamics, is balanced against significant white space opportunities across segments and geographies.
2. Operating Margins: 19%
e.l.f. Beauty achieved strong operational performance despite the pressures of tariffs. The company demonstrates pricing discipline with strategic $1 price increases while maintaining value positioning with 75% of the portfolio under $10.
Management targets margin resilience through pricing optimization, supply chain diversification, and an international expansion strategy that offers a mix of benefits.
e.l.f. Beauty expects sustainable margin performance through operational leverage, innovation-driven pricing power, and geographic diversification as tariff mitigation strategies take effect throughout fiscal 2026.
3. Exit P/E Multiple: 28x
ELF stock trades at reasonable multiples reflecting its exceptional growth profile and market leadership position across accessible beauty markets. The valuation accounts for execution risks, tariff impacts, and competitive dynamics while recognizing proven performance.
We maintain reasonable valuation levels given e.l.f. Beauty’s market positioning, innovation capabilities, and systematic approach to building sustainable competitive advantages through brand strength and operational excellence.
Long-term competitive advantages, including value proposition leadership, an innovation engine, and customer community engagement, should support premium valuations as the company captures emerging market opportunities and scales strategic initiatives.
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What Happens If Things Go Better or Worse?
Different scenarios for ELF stock through 2030 show varied outcomes based on AI execution and creative software market conditions: (these are estimates, not guaranteed returns):
- Low Case: Slower international expansion and tariff pressures → 7% annual returns
- Mid Case: Successful growth strategy execution and market leadership → 13% annual returns
- High Case: Strong Rhode integration and accelerated expansion → 18% annual returns
Even in the conservative case, e.l.f. Beauty stock offers attractive returns supported by the company’s unique market positioning and proven ability to gain share while maintaining profitability across diverse beauty categories.
The upside scenario for ELF stock could deliver exceptional performance if it successfully captures international expansion opportunities while maximizing Rhode’s premium positioning and market potential.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
