Core Viewpoint - Piper Sandler has lowered its price target for e.l.f. Beauty, Inc. to $85.00 from $100.00 while maintaining a Neutral rating, resulting in a more than 2% decline in shares on Monday [1] Group 1: Market Competition - Intensifying competition is noted as rivals regain momentum, impacting e.l.f.'s market share gains which slowed in the second quarter of fiscal 2026 but showed improvement in the third quarter due to product launches [2] - Competitors such as L'Oréal, NYX, and Maybelline are increasing their innovation efforts, raising the bar for differentiation in the market [2] Group 2: Sales Growth Estimates - The third-quarter fiscal 2026 estimate for core e.l.f. sales growth has been raised to 5%, exceeding the company's annual guidance of 3%–4% [3] - However, the fourth-quarter forecast has been lowered to a 1% decline due to challenging comparisons [3] Group 3: Valuation Metrics - The reduced price target reflects a valuation of 16x fiscal 2027 EBITDA, down from 18x previously [4] - The stock's current P/E multiple of 26x is near the midpoint of its recent 18x–35x range and may face compression if shipments continue to lag behind consumption trends into fiscal 2027 [4]

Market Overview - Stocks are expected to open higher as the holiday-shortened trading week begins, following a volatile week where the S&P 500 recorded its third winning week in four [1] - There is uncertainty regarding the occurrence of a "Santa Claus Rally" due to the New York Stock Exchange closing early on Wednesday and entirely on Thursday for Christmas [1] Gold Market - Gold prices have reached a record high, increasing approximately 70% since the beginning of 2025, positioning gold as a more favorable wealth source compared to bitcoin [2] Nvidia - Nvidia shares increased by 2% after reports indicated the company aims to start shipping its H200 chips to China before mid-February, suggesting a potential recovery for the stock [3] OpenAI Funding - OpenAI is in discussions to raise $100 billion at an $830 billion valuation, up from a previously targeted $500 billion valuation within a week, which will support Oracle's data center buildout to compete with Google's AI model [4] GE Vernova - Jefferies raised its price target for GE Vernova to $830 from $815 while maintaining a buy rating, reflecting updated valuations that account for share repurchases through 2028, highlighting its role in the data center sector [5] Paramount's Acquisition Attempt - Paramount Skydance secured backing from billionaire Larry Ellison in its hostile bid to acquire Warner Bros. Discovery, following Netflix's agreement to purchase WBD's studio and streaming assets [6] Clearwater Analytics - Clearwater Analytics received an $8.5 billion acquisition offer from a group led by Permira and Warburg Pincus, with mixed analyst reactions regarding the likelihood of competing bids [7] E.l.f. Beauty - Piper Sandler reduced E.l.f. Beauty's price target to $85 from $100 while maintaining a hold rating, citing slower market share gains compared to competitors, though the new target still suggests nearly 6% upside from the previous close [8] Financial Services Sector - Morgan Stanley increased price targets for several financial services companies, including Intercontinental Exchange to $174 from $169, Charles Schwab to $148 from $139, and Robinhood to $147 from $146, driven by strong industry transactions and raised earnings estimates [9] Rocket Lab - Rocket Lab achieved a successful launch, marking its 21st perfect launch, prompting Stifel to raise its price target to $85 from $75 while maintaining a buy rating, supported by a contract worth up to $850 million from the Space Development Agency [10]

Core Insights - e.l.f. Cosmetics has extended its partnership with The Wonder Women of Wrestling Foundation for a second consecutive year, becoming the first beauty sponsor of the WWOWF Varsity Girls Wrestling Tournament scheduled for December 29-30, 2025, in Columbia, Missouri [1][2] Company Commitment - The partnership emphasizes e.l.f.'s dedication to promoting equality for women and girls in sports, particularly in areas that have historically lacked visibility, funding, and access [2][6] Industry Growth - Girls wrestling is identified as the fastest-growing high school sport in America, with participation increasing to over 74,000 athletes in the 2024-2025 school year, marking a 15% rise from the previous year, and nearly 1,000 additional schools adding girls wrestling programs [3][4] Event Significance - The seventh annual tournament in Columbia is one of the largest high school girls wrestling competitions in the U.S., showing significant year-over-year growth in attendance and awareness, indicating a cultural shift in the perception of girls wrestling [4][9] Scholarship Support - As part of the sponsorship, e.l.f. Cosmetics will support eight college-bound senior wrestlers through scholarships awarded via the WWOWF's annual essay competition, aimed at reducing financial barriers to higher education [5][6] Broader Initiatives - e.l.f. Cosmetics' partnership with WWOWF is part of a larger strategy to invest in women's sports, which includes long-term commitments to various sports leagues and initiatives, focusing on expanding access, increasing visibility, and funding scholarships [6][7]

Group 1 - e.l.f. Beauty, Inc. is currently experiencing temporary shipment timing challenges that are affecting its sales [1] - Despite these challenges, the company is expected to see an acceleration in revenue growth beyond the current fiscal year [1] Group 2 - The analyst has over 15 years of experience in investment and research services, focusing on mid-sized hedge funds [1] - The investment strategy includes medium-term investing in growth stories available at reasonable prices and short selling when downside catalysts are identified [1] - The analyst has a background in analyzing industrial, consumer, and technology sectors, which informs their investment convictions [1]

Group 1 - e.l.f. Beauty, Inc. is currently experiencing temporary shipment timing challenges that are affecting its sales [1] - Despite these challenges, the company is expected to see an acceleration in revenue growth beyond the current fiscal year [1] Group 2 - The analyst has over 15 years of experience in investment and research services, focusing on mid-sized hedge funds [1] - The investment strategy includes medium-term investing in growth stories available at reasonable prices and short selling when downside catalysts are identified [1] - The analyst has a background primarily in industrial, consumer, and technology sectors, where higher conviction in investments is typically found [1]

Core Viewpoint - e.l.f. Beauty has launched a new makeup game called Glow Up! on Roblox, aiming to enhance self-expression among gamers [1] Group 1: Product Launch - The Glow Up! game is described as a next-generation makeup game and immersive beauty experience [1] - The game is specifically designed for players aged 13 and above [1] Group 2: Market Insight - 60% of gamers believe that self-expression through gameplay is increasingly important [1] - e.l.f. Beauty is positioning itself to redefine authenticity for Roblox players [1]

Key Takeaways ELF gained 140 basis points of market share as brand demand stayed strong in Q2 FY26.ELF invests 24%-26% of sales in marketing, lifting brand awareness across the United States and abroad.ELF expects 18%-20% net sales growth in FY26, supported by innovation and value pricing.Brand-led innovation is emerging as a critical driver of e.l.f. Beauty Inc.’s (ELF) growth momentum in fiscal 2026, enabling the company to outperform a slow-growing mass beauty category. In the second quarter of fiscal 20 ...

Company Performance - e.l.f. Beauty's stock closed at $76.36, reflecting a -2.09% change from the previous day, which was less than the S&P 500's daily loss of 1.07% [1] - Over the past month, e.l.f. Beauty shares have gained 4.84%, while the Consumer Staples sector has lost 0.24% [1] Upcoming Earnings - The company is expected to report an EPS of $0.68, down 8.11% from the prior-year quarter, with a revenue estimate of $452.79 million, indicating a 27.43% increase compared to the same quarter of the previous year [2] - For the annual period, the anticipated earnings are $2.93 per share and revenue of $1.57 billion, reflecting shifts of -13.57% and +19.37% respectively from the last year [3] Analyst Revisions and Rankings - Recent revisions to analyst forecasts for e.l.f. Beauty are crucial as they often indicate shifting business dynamics, with positive revisions reflecting analyst optimism [3] - e.l.f. Beauty currently holds a Zacks Rank of 5 (Strong Sell), with the Zacks Consensus EPS estimate remaining stagnant over the past month [5] Valuation Metrics - The company has a Forward P/E ratio of 26.58, which is a premium compared to the industry average Forward P/E of 8.06 [6] - e.l.f. Beauty's PEG ratio stands at 4.19, while the average PEG ratio for cosmetics stocks is 0.86 [6] Industry Context - The Cosmetics industry is part of the Consumer Staples sector and currently holds a Zacks Industry Rank of 206, placing it in the bottom 17% of all industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - e.l.f. Beauty, Inc. (ELF) has experienced a significant decline in share price, dropping 37.9% year-to-date due to investor concerns over slowing organic growth, margin pressures, and a challenging outlook [1][7]. Performance Comparison - e.l.f. Beauty has underperformed compared to the industry growth of 10.3%, the Zacks Consumer Staples sector's decline of 0.9%, and the S&P 500's gain of 19.5% [2]. - Major competitors like The Estee Lauder Companies Inc. and Nu Skin Enterprises, Inc. have seen substantial gains of 40.8% and 52.1% respectively, while Interparfums, Inc. has dropped 37% [2]. Business Challenges - The core business of e.l.f. Beauty has softened, with organic sales turning negative in Q2 of fiscal 2026 due to shipment disruptions and delayed price increases by retailers [3]. - International growth has also slowed, particularly in key European markets, due to tough comparisons [3]. Cost Pressures - Approximately 75% of e.l.f.'s production is based in China, making the company vulnerable to increased tariff rates, which have led to a significant contraction in gross margin [4]. - Despite price adjustments, the company has struggled to fully offset the cost burden from tariffs, which are expected to persist into fiscal 2026 [4]. Operating Expenses - Operating expenses are high, with increased marketing spending and elevated SG&A costs due to team expansion and infrastructure investments, contributing to a decline in adjusted EBITDA [5]. Financial Outlook - Analysts have significantly lowered their EPS estimates for fiscal 2026 and 2027 due to slowing organic growth, higher tariff costs, and ongoing SG&A pressures [9]. - The current Zacks Consensus Estimate for fiscal 2026 EPS is 2.93, down from previous estimates of 3.53 [10]. Valuation - e.l.f. Beauty's forward 12-month P/E ratio is 22.32X, below the industry average of 29.23X, but ongoing margin pressures limit the attractiveness of this valuation [10]. - The company has a Value Score of F, indicating weak value traits compared to peers [10]. Strengths - Despite the challenges, e.l.f. Beauty maintains strong brand momentum and market-leading consumption growth, with the Rhode acquisition contributing positively to growth [11]. - The brand's successful debut at Sephora and rapid e-commerce expansion have enhanced the company's portfolio [11].

Core Insights - E.l.f. Beauty has experienced a significant decline in stock value, down 42% over the past year, despite gaining market share from traditional cosmetics leaders [1] - The company faces challenges due to high inflation and tariffs affecting its supply chain, particularly since 75% of its products are manufactured in China [3][5] - E.l.f. is capturing market share as consumers shift from luxury to mass brands, and it recently launched the luxury brand Rhode at Sephora, marking a successful entry [4] Financial Performance - In the fiscal second quarter of 2026, E.l.f. reported a 14% year-over-year increase in sales, but gross margin decreased by 1.65 percentage points to 69%, and adjusted EPS fell from $0.77 to $0.68 [5] - Management's guidance for full-year sales was below analyst expectations, indicating potential challenges ahead [5] Market Position and Future Outlook - E.l.f. has a market capitalization of $5 billion and trades at a price-to-earnings (P/E) ratio of 58, reflecting market confidence but also a premium valuation given its current performance [7][9] - For improvement in 2026, the company needs to enhance its supply chain and potentially localize production to mitigate tariff impacts, alongside benefiting from lower inflation [7] - There is potential for stock price recovery if E.l.f. exceeds expectations, but volatility may persist until market conditions stabilize [10]