Core Viewpoint - e.l.f. Beauty is experiencing strong growth and market share gains despite uncertainties related to tariffs, supported by a global price increase and the acquisition of Rhode, a high-growth brand [1][3][8] Financial Performance - In FQ4, e.l.f. Beauty reported revenues of $332.65 million, reflecting a 3.6% increase year-over-year, which exceeded MarketBeat's consensus by nearly 200 basis points [3] - The adjusted earnings per share of $0.78 is up nearly 50% year-over-year and significantly above consensus estimates [5] - The company has seen a 50% year-over-year increase in cash build, indicating strong cash flow management [5] Market Position and Growth Drivers - e.l.f. Beauty has achieved 25 consecutive months of double-digit market share gains in the U.S., driven by strong performance in retail and eCommerce channels [4] - The acquisition of Rhode, valued at $800 million upfront with an additional $200 million based on milestones, is expected to enhance growth and market presence [6] Analyst Sentiment and Stock Performance - Analysts have raised their 12-month stock price forecast to $117.76, indicating a potential upside of 4.58% from the current price of $112.61 [7] - The stock price experienced a 25% increase following the positive results and acquisition news, reflecting a bullish sentiment shift [11] - Short interest remains at 12%, indicating potential for a short squeeze, although analysts believe the current outlook mitigates risks [10] Operational Efficiency - The company benefited from foreign exchange tailwinds, leading to lower costs of goods and improved gross and operating margins [4] - Total liabilities, including long-term debt, are less than 1x equity and 2x cash, positioning the company favorably for future investments [6]

Core Insights - E.l.f. Beauty has acquired Hailey Bieber's Rhode brand for $800 million, with potential total payouts reaching $1 billion based on future growth [3][4][15] - The acquisition is seen as a strategic move to diversify E.l.f.'s portfolio and capitalize on Rhode's innovative approach and celebrity influence [4][15] - E.l.f. has experienced significant revenue growth, increasing from $230 million in 2016 to a projected $1.3 billion in fiscal 2025, although growth has slowed recently [15][16] Company Overview - E.l.f. Beauty was founded in 2004 and aims to disrupt the traditional beauty industry with affordable pricing and innovative marketing strategies [1][2] - The company ranks as the number one cosmetics brand in the U.S. by unit sales and second in dollar share, maintaining an average product price well below competitors [2] Acquisition Details - The acquisition of Rhode marks E.l.f.'s third major acquisition, following W3ll People for $27 million in 2020 and Naturium for $355 million in 2023 [4] - Rhode has generated $212 million in sales primarily through e-commerce, with plans to expand into retail through Sephora [5][17] Market Context - The $1 billion valuation for Rhode is notable given its short operational history of three years and a limited product range, raising questions about sustainability [7][8] - Comparatively, other recent beauty acquisitions include L'Oréal's $2.5 billion purchase of Aesop and Estée Lauder's $2.8 billion acquisition of Tom Ford, both of which included established retail presences [5][6] Brand Dynamics - Rhode's success is attributed to its community engagement and innovative product development, with a strong social media presence [10][11] - Hailey Bieber's influence and the brand's unique marketing strategies, such as collaborations with popular food brands, have contributed to its rapid growth [13][14] Future Outlook - E.l.f. anticipates that Rhode's integration will enhance its product development capabilities and expand its market reach, with Bieber remaining as chief creative officer [17][18] - The partnership is viewed as a critical juncture for E.l.f., which has invested heavily in this acquisition and must ensure its success to avoid potential pitfalls similar to those faced by other celebrity-driven brands [19]

Group 1 - e.l.f. Beauty reported quarterly earnings that exceeded analysts' expectations, achieving a double beat in earnings and revenue [1] - The company is focusing on identifying high-quality companies with a market capitalization of less than $10 billion, which presents significant growth opportunities [1] - The ideal target companies should demonstrate a long-term capability of capital compounding with a high compound annual growth rate, potentially delivering tenfold returns or more [1] Group 2 - A conservative investment strategy is primarily adopted, with occasional pursuits of opportunities that present a favorable risk-reward ratio [1] - The approach emphasizes maintaining a long-term perspective on investments to generate higher returns compared to market indices [1]

Core Viewpoint - e.l.f. Beauty has experienced a significant stock price increase following strong earnings results and the announcement of an acquisition, indicating positive market sentiment and growth potential for the company [1][11]. Financial Performance - e.l.f. reported a net sales growth of 28% for fiscal 2025 Q4, outperforming the consumer staples sector's growth of 4% and analysts' forecast of less than 2% [2]. - The adjusted diluted earnings per share (EPS) increased by 47% to $0.78, surpassing expectations of approximately 36% growth [3]. - The adjusted EBITDA margin nearly doubled from 12.7% in fiscal Q4 2024 to 24.5% in fiscal Q4 2025 [2]. Tariff Impact - The company highlighted significant exposure to tariff risks, particularly as 75% of its global production is sourced from China, which is currently subject to 55% tariffs [4]. - If tariffs remain at current levels, e.l.f. estimates an annual increase of $50 million in its cost of goods sold, which would reduce its adjusted gross margin from 71.2% to 67.4% [5]. - The company plans to increase prices across all products by $1 starting August 1 to mitigate tariff impacts [6]. Acquisition of Rhode - e.l.f. announced the acquisition of Rhode, a fast-growing beauty brand, for a total potential price of $1 billion, with $800 million paid upfront and $200 million contingent on growth targets [9]. - Rhode achieved $212 million in net sales over the last 12 months, contributing to e.l.f.'s growth strategy [7]. - The acquisition is expected to be moderately dilutive to existing shareholders, increasing the company's issued share count by approximately 4.7% and nearly tripling its total debt from $305 million [10]. Analyst Sentiment - Analysts at Bank of America have raised their price target for e.l.f. to $113, citing the positive contributions expected from the Rhode acquisition to e.l.f.'s gross margin, EBITDA margin, and earnings [11].

Core Insights - European Wax Center, Inc. (EWCZ) is currently rated as a Strong Buy with a Zacks Rank of 1, while e.l.f. Beauty (ELF) holds a Zacks Rank of 3, indicating a Hold status [3] - EWCZ has demonstrated stronger earnings estimate revision activity compared to ELF, suggesting a more favorable analyst outlook for EWCZ [3][7] Valuation Metrics - EWCZ has a forward P/E ratio of 8.57, significantly lower than ELF's forward P/E of 26.91, indicating that EWCZ may be undervalued [5] - The PEG ratio for EWCZ is 0.47, while ELF's PEG ratio stands at 6.18, further supporting the notion that EWCZ is a better value opportunity [5] - EWCZ's P/B ratio is 2.95, compared to ELF's P/B of 6.65, reinforcing EWCZ's more attractive valuation metrics [6] Value Grades - EWCZ has received a Value grade of A, while ELF has been assigned a Value grade of F, highlighting the significant difference in perceived value between the two stocks [6]

Group 1 - elf Beauty Inc announced a $1 billion acquisition of Rhode, a skincare brand founded by Hailey Bieber, which is expected to enhance its skincare offerings and attract higher-income consumers [1] - The acquisition news coincided with a strong fiscal fourth-quarter earnings report, where elf Beauty reported adjusted earnings of 78 cents per share on $333 million in revenue, surpassing Wall Street expectations [1] - The company withheld full-year guidance due to uncertainties related to tariffs [1] Group 2 - Following the acquisition announcement, elf Beauty's stock surged 31.1% to $118.63, marking its highest level since January and reducing its year-to-date deficit to 6% [2] - The stock has experienced a nearly 90% increase in the past month and has reclaimed its 200-day moving average, which had been a resistance level since last August [2] Group 3 - At least four analysts raised their price targets for elf Beauty, with Canaccord Genuity increasing its target from $105 to $114, indicating potential for further upward revisions [3] - The average 12-month target for the stock is $99.22, suggesting a nearly 10% discount to current trading levels [3] Group 4 - Options activity for elf Beauty is significantly high, with over 25,000 calls and 21,000 puts exchanged, which is 13 times the average intraday volume [4] - New positions are being opened at nine of the ten most active contracts, led by the weekly 5/30 110-strike put [4]

Group 1 - e.l.f. Beauty Inc. (ELF) experienced a significant stock price increase of 31%, marking its best intraday performance since September 2016, with a cumulative rise of approximately 47.6% over the past five trading days [1] - The "Trump Tariff Losers Index" saw a rise of 1.67%, with e.l.f. Beauty leading among its constituents [1] Group 2 - The current stock price of e.l.f. Beauty is 118.50 USD, reflecting an increase of 37.98 USD (47.17%) over the past five days [3] - The market capitalization of e.l.f. Beauty is reported at 5.104 billion USD, with a 52-week high of 219.77 USD and a low of 49.40 USD [3]

Core Insights - Hailey Bieber's beauty brand Rhode has signed a $1 billion deal with e.l.f. Beauty, marking a significant milestone in her entrepreneurial journey [2][3] - Following the deal, Hailey is set to receive $800 million in cash and stock, with the potential for an additional $200 million based on sales growth over the next three years, totaling $1 billion [3] - Rhode's net sales reached $212 million in the past 12 months, indicating strong market performance and brand success [9] Company Overview - Rhode was founded by Hailey Bieber in 2020 and launched skincare and lip products in 2022, achieving notable success and recognition [16] - Hailey has taken on the role of Chief Creative Officer and Innovation Lead at Rhode, while also becoming a strategic advisor for e.l.f. Beauty [9] Market Performance - The partnership with e.l.f. Beauty is expected to enhance Rhode's market presence and drive further growth, aligning with Hailey's vision of expanding the brand globally [7] - The deal reflects the increasing trend of celebrity-led brands in the beauty industry, which often leverage personal branding and social media influence for market penetration [2][7]

Core Viewpoint - Elf Beauty is acquiring Hailey Bieber's makeup and skincare brand, Rhode, for approximately $1 billion, which includes $800 million in cash and stock, plus a potential earnout of $200 million based on performance [1][4][10]. Group 1: Acquisition Details - The acquisition marks Elf's largest deal to date, following its $355 million purchase of skincare company Natrium in 2023 [10]. - Hailey Bieber will remain as founder and serve as a strategic advisor post-acquisition, which is expected to close in the second quarter of fiscal 2026 [11][13]. - The deal allows Elf to enter the prestige beauty market, diversifying its portfolio amid weak demand from mass-market consumers due to high inflation [4][10]. Group 2: Market Position and Strategy - Rhode, launched in 2022, has gained popularity through viral products on TikTok, such as its $18 "peptide lip treatments," and sells exclusively through its website and pop-up stores [6]. - Elf Beauty, known for its low-priced products starting at $2, is facing challenges in the mass market and aims to expand its reach with the acquisition of Rhode [5][9]. - The deal is seen as a strategic move to tap into the strong Gen Z following of Rhode, which has maintained momentum in a slowing prestige beauty market [5][10]. Group 3: Financial Performance and Future Outlook - Elf reported approximately $212 million in sales for the year ending March 31 and plans to expand distribution by selling at Sephora stores in the US, Canada, and the UK [9]. - The company has refrained from providing a fiscal 2026 forecast due to uncertainties regarding import tariffs, despite exceeding Wall Street expectations for fourth-quarter sales [11][12].

Group 1: Earnings Performance - E.l.f. Beauty reported quarterly earnings of $0.78 per share, exceeding the Zacks Consensus Estimate of $0.73 per share, and up from $0.53 per share a year ago, representing an earnings surprise of 6.85% [1] - The company posted revenues of $332.65 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.92%, compared to year-ago revenues of $321.14 million [2] - Over the last four quarters, E.l.f. Beauty has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - E.l.f. Beauty shares have declined approximately 27% since the beginning of the year, while the S&P 500 has gained 0.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.95 on revenues of $353.22 million, and for the current fiscal year, it is $3.36 on revenues of $1.44 billion [7] - The estimate revisions trend for E.l.f. Beauty is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Cosmetics industry, to which E.l.f. Beauty belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]