Key Takeaways:
- Raised Fiscal Outlook: e.l.f. Beauty increased fiscal 2026 net sales guidance to $1.60 billion to $1.61 billion and adjusted EPS to $3.05 to $3.10 after Q3 revenue rose 38% to $490 million and market share gained 130 basis points.
- Low-Cost Leadership Intact: e.l.f. Beauty implemented a 15% price increase yet keeps 75% of products at $10 or less and remains about 20% cheaper than mass competitors, sustaining 22% to 23% expected annual revenue growth.
- Price Projection: Based on fiscal 2026 adjusted EBITDA of $323 million to $326 million and EPS near $3, e.l.f. Beauty aligns with the $110 median analyst target over the next 12 months.
- Potential Upside: At $81 with a $4.8 billion market cap and a 42 P/E, e.l.f. Beauty implies 35% upside to $110, equating to roughly 35% annualized return if earnings trajectory holds.
Breaking Down the Case for e.l.f. Beauty, Inc.
e.l.f. Beauty (ELF) lifted fiscal 2026 net sales guidance to $1.60 billion to $1.61 billion after delivering Q3 revenue growth of 38% to $490 million and adjusted EBITDA growth of 79%, reinforcing a 22% to 23% full-year sales outlook amid category expansion.
Revenue reached $1.52 billion over the last twelve months while gross profit totaled $1.07 billion with gross margins of 70%, as operating income improved to $180 million and operating margins stood near 12% despite tariff pressure.
Tariffs currently sit at 45% after peaking at 170%, creating more than $50 million in annual cost exposure, yet 75% of products remain priced at $10 or less and management expects fiscal 2026 adjusted EBITDA margins near 20%.
The $1 billion acquisition of rhode contributed $128 million in Q3 sales and carries fiscal 2026 revenue expectations of $260 million to $265 million, while adjusted EPS guidance increased to $3.05 to $3.10.
CEO Tarang Amin in Q3 2026 Earnings Call, “We grew net sales 38% and adjusted EBITDA 79%,” underscoring confidence in continued share gains as global consumption growth runs near 6% and the brand added 130 basis points of share.
The stock has declined 39% in 2025 and remains more than 60% below its all-time high, yet trades at 42x earnings compared with 30x three months ago and below its average multiple since 2022.
With a $4.8 billion market cap and a current price near $81 versus a $110 median target, investors must weigh 35% implied upside against tariff exposure and 20% EBITDA margin expectations.
What the Model Says for e.l.f. Beauty Stock
e.l.f. beauty stock delivered 28.3% revenue growth in the last fiscal year and maintains EBITDA margins near 20%, while recent tariff pressure and elevated marketing spend temper expectations into fiscal 2026.
The market assumption uses 17.2% revenue growth and 17.1% margins, below the recent 28.3% growth and 19.4% operating margin, alongside a 24.8x exit multiple that aligns with the current 24.78x forward P/E.
These market assumptions generate a $118.84 target price, implying 45.8% total upside and a 19.4% annualized return from the $81.50 current price.
The model signals a Buy, as a 19.4% annualized return materially exceeds a 10% hurdle rate under conservative market assumptions relative to recent performance.
A 19.4% annualized return stands well above a 10% equity hurdle rate and supports capital appreciation, as the market assumption of 17.2% growth and a 24.8x multiple remains below recent historical levels, justifying a Buy on valuation math.
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 e.l.f. stock:
1. Revenue Growth: 17.2%
e.l.f. beauty stock has delivered 38% Q3 net sales growth and 22% to 23% full-year guidance, yet organic growth excluding rhode stands near 2%, which frames 22% as acquisition-supported rather than purely volume-driven expansion.
Current execution reflects $489 million in Q3 sales, 130 basis points of share gains, and rhode contributing $128 million in the quarter, while global consumption trends have moderated from 8% to 6%.
The 22% Market assumption requires sustained 70% rhode growth and stabilization in the U.K. and Germany, while tariffs at 45% and promotional intensity limit organic acceleration beyond low single digits.
This is in line with the historical 1-year revenue growth of 21%, indicating that the model assumes continued acquisition-led scale rather than a structural re-acceleration in the core brand.
2. Operating Margins: 17.1%
e.l.f. beauty stock reported a 71% gross margin in Q3 and adjusted EBITDA margin near 20%, yet marketing spend is expected to rise to 27% of sales in the second half.
Management expects full-year adjusted EBITDA of $323 million to $326 million, implying approximately 20% margins despite tariff costs above $50 million and incremental investments in team and space expansion.
The 20% Market assumption presumes price increases of 15% hold, volume declines remain single digit, and marketing efficiency offsets cost pressures without margin erosion.
This is in line with the historical 1-year adjusted EBITDA margin near 20%, indicating that the model assumes cost discipline offsets reinvestment rather than material operating leverage expansion.
3. Exit P/E Multiple: 24.8x
The exit multiple capitalizes normalized net income under steady-state conditions after rhode integration and tariff normalization, while recognizing that recent volatility and a 39% stock decline have reset investor expectations.
e.l.f. Beauty stock currently trades near 25× next twelve-month earnings compared with 30× three months ago, which frames 25× as a normalization rather than a re-rating assumption.
The 25× Market assumption acknowledges sustained double-digit growth and durable brand economics, while avoiding double counting of margin stability and share gains already embedded in earnings.
This is below the recent 1-year forward P/E of 30, indicating that the model assumes valuation normalization as growth matures and risk around tariffs and international softness remains present.
What Happens If Things Go Better or Worse?
e.l.f. beauty stock is shaped by brand relevance, pricing power after recent increases, and tariff pressure, setting a wide range of scenarios through 2030.
- Low Case: If tariff pressure lingers and consumer trade-down slows, revenue grows 12.2% with 11.2% margins as valuation eases → 7.3% annualized return.
- Mid Case: With rhode integration steady and core brand share gains intact, revenue grows 13.5% and margins reach 11.9% under stable valuation → 13.6% annualized return.
- High Case: If global demand stabilizes and pricing holds without volume erosion, revenue reaches 14.9% and margins approach 12.3% as valuation expands → 19.5% annualized return.
How Much Upside Does e.l.f. beauty Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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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!
