Core Viewpoint - A class action lawsuit has been filed against e.l.f. Beauty, Inc. for alleged violations of securities laws, specifically related to false and misleading statements made by the company regarding its financial performance and inventory levels [1][4]. Group 1: Lawsuit Details - The lawsuit pertains to securities purchased between November 1, 2023, and November 19, 2024, during which the company allegedly inflated revenue and other financial metrics to maintain investor confidence [2][4]. - The Schall Law Firm is representing investors and encourages those who suffered losses to participate in the lawsuit before the deadline of May 5, 2025 [2][5]. Group 2: Allegations Against the Company - The complaint claims that e.l.f. Beauty made false statements to the market, particularly regarding rising inventory levels, which the company misattributed to changes in sourcing rather than underlying issues [4]. - The misleading public statements are said to have caused significant damages to investors once the truth about the company's financial situation was revealed [4].

Company Overview - e.l.f. Beauty, Inc. (ELF) has experienced a significant stock price decline of 54.2% over the past three months, underperforming the industry decline of 21.7% and the broader Zacks Consumer Staples sector growth of 2.4% [1] - The stock closed at $25.90, nearing its 52-week low of $21.10, and is trading below its 50 and 200-day moving averages, indicating potential weakness [2][8] Valuation Concerns - Despite the stock price decline, e.l.f. Beauty is trading at a forward 12-month P/E ratio of 17.71, which is higher than competitors like Nu Skin Enterprises, Inc. (7.26) and Coty Inc. (11.89), raising questions about its valuation [4] - The company's Value Score of F adds to concerns regarding its future performance [4] Market Challenges - The beauty and cosmetics industry is facing challenges due to evolving consumer preferences, rising inflation, and cautious spending, which are impacting many brands, including e.l.f. Beauty [9] - e.l.f. Beauty has lowered its fourth-quarter fiscal 2025 sales guidance to a modest -1% to +2%, indicating a potential slowdown in growth [10] Competitive Landscape - Established beauty giants like The Estee Lauder Companies continue to dominate the market, while indie brands are attracting consumers with niche offerings and innovative marketing strategies [10] - e.l.f. Beauty's adjusted SG&A expenses increased to 61% of net sales in the fiscal third quarter, up from 59% the previous year, reflecting higher spending on marketing and operations [11] Earnings Outlook - The Zacks Consensus Estimate for e.l.f. Beauty's earnings per share has been revised downward over the past 30 days, indicating a growing bearish outlook among analysts [12] - Recent estimates show a decline in expected earnings for the current and upcoming fiscal years, with current estimates at 0.74 for Q1 2025 and 3.33 for the current year [13] Growth Initiatives - e.l.f. Beauty is focusing on growth initiatives, including strengthening its brand through innovation and strategic expansion, with its skincare segment now representing 18% of total retail sales [14] - The company is expanding retail partnerships and maintaining high productivity per square foot among major cosmetics brands, positioning itself for long-term success [14]

Company Performance - e.l.f. Beauty has experienced a significant decline in stock price, returning -39.9% over the past month, while the Zacks S&P 500 composite increased by +2.2% [1] - The Zacks Cosmetics industry, which includes e.l.f. Beauty, has lost 15.6% during the same period [1] - The company reported revenues of $355.32 million in the last quarter, reflecting a year-over-year increase of +31.1% [9] - The earnings per share (EPS) for the last quarter was $0.74, unchanged from the previous year [9] Earnings Estimates - For the current quarter, e.l.f. Beauty is expected to post earnings of $0.74 per share, indicating a year-over-year change of +39.6% [4] - The Zacks Consensus Estimate for the current fiscal year is $3.33, showing a year-over-year change of +4.7%, but has decreased by -14.8% over the last 30 days [4] - For the next fiscal year, the consensus earnings estimate is $3.63, indicating a +9.1% change from the previous year, with a recent decrease of -16.5% [5] Revenue Growth Forecast - The consensus sales estimate for the current quarter is $327.88 million, indicating a year-over-year change of +2.1% [8] - For the current fiscal year, the sales estimate is $1.31 billion, reflecting a +27.8% change, while the next fiscal year's estimate is $1.45 billion, indicating an +11.1% change [8] Valuation - e.l.f. Beauty has a Zacks Rank of 5 (Strong Sell), suggesting potential underperformance in the near term [6][15] - The company is graded F on the Zacks Value Style Score, indicating it is trading at a premium compared to its peers [14]

Core Viewpoint - The S&P 500 has increased by 81% over the last five years, reaching an all-time high, making it challenging to find quality growth stocks that are not also hitting new highs [1] Group 1: Five Below - Five Below has demonstrated strong revenue growth, with net sales up 12% year-over-year for the first three quarters of fiscal 2024, attributed to the opening of 205 new stores [3] - The company plans to open approximately 1,800 additional stores by 2030, indicating its growth potential [3] - Despite challenges from inflation and international sourcing, the stock price may already reflect these issues, trading at about 20 times the expected earnings per share of $4.34 to $4.52 [5] - Five Below has a robust balance sheet with over $200 million in cash and no debt, positioning it well to navigate economic challenges [6] Group 2: The Trade Desk - The Trade Desk reported a revenue miss for Q4 2024, generating $741 million against a guidance of at least $756 million, leading to a stock decline of over 40% [7] - The company has undergone a significant reorganization to enhance growth potential, as stated by CEO Jeff Green [8] - The Trade Desk's addressable market is estimated at $1 trillion, with current platform revenue at $12 billion, indicating substantial growth opportunities [10] - Despite a drop in Q4 revenue growth to 22% and a forecast of 17% for the next quarter, the management's track record suggests potential for recovery [10][11] Group 3: e.l.f. Beauty - e.l.f. Beauty's management anticipates only a 2% increase in net sales for the upcoming fiscal fourth quarter of 2025, but this may be a temporary setback [12] - The company has gained market share in mass-market cosmetics, despite current sales slowing [13][14] - International sales for e.l.f. Beauty grew by 66% year-over-year in Q3, representing only 20% of total sales, indicating significant growth potential in international markets [15]

Core Viewpoint - Berman Tabacco is investigating potential securities law violations by e.l.f. Beauty, Inc. following significant concerns regarding the company's revenue and a notable decline in its stock price [1][2]. Investigation Details - On November 20, 2024, concerns were raised by the CEO of Muddy Waters Capital, who indicated he was shorting e.l.f. Beauty's stock due to revenue-related issues [2]. - On February 7, 2025, e.l.f. Beauty's shares experienced a decline of up to 28% after the company lowered its fiscal-year projections for sales and profits [2]. Company Background - e.l.f. Beauty, Inc. is a cosmetics company based in Oakland, California, and is publicly traded on the NYSE under the ticker symbol ELF [1]. - Berman Tabacco has a long history of prosecuting securities cases on behalf of investors and has received recognition for its work in this field [3].

Core Insights - The article discusses the investment positions of Parkev Tatevosian, CFA, and mentions that The Motley Fool has positions in and recommends e.l.f. Beauty [1] Company Insights - e.l.f. Beauty is highlighted as a recommended stock by The Motley Fool, indicating a positive outlook on the company's performance and potential for growth [1]

Group 1 - e.l.f. Beauty has warned about slowing sales in January 2025, leading to a lowered fiscal full year 2025 guidance and a significant drop in shares [1] - The company reported fiscal third quarter 2025 earnings of $0.74, missing the Zacks Consensus estimate of $0.76, despite a 31% increase in sales to $355.3 million [2][4] - Gross margin increased by 40 basis points to 71%, attributed to favorable foreign exchange impacts, cost savings, and inventory adjustments, although offset by higher transportation costs [3] Group 2 - e.l.f. Beauty has revised its fourth quarter and full year guidance, now expecting a 27-28% year-over-year net sales increase, down from 28-30%, and lowering full year earnings guidance to $3.27 to $3.32 from $3.47 to $3.53 [4] - Analysts have cut their fiscal 2025 estimates, with the Zacks Consensus dropping from $3.60 to $3.33, indicating only 4.7% earnings growth over fiscal 2024 [5] - For fiscal 2026, estimates were also reduced, with the Zacks Consensus falling from $4.35 to $3.63, still reflecting a 9.1% earnings growth [6] Group 3 - e.l.f. Beauty shares have declined 54% over the last year, exacerbated by the lowered guidance, although they remain above the S&P 500's performance over the past five years [7] - The company, once a high-growth stock post-pandemic, now trades at a forward P/E of 21.9, which is still above typical value stock levels [8]

Group 1 - e.l.f. Beauty has an average brokerage recommendation (ABR) of 1.67, indicating a consensus between Strong Buy and Buy from 18 brokerage firms, with 66.7% of recommendations being Strong Buy [2][4] - The ABR should not be the sole basis for investment decisions, as studies suggest brokerage recommendations often lack success in guiding investors towards stocks with significant price appreciation potential [4][9] - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, with a ratio of five "Strong Buy" recommendations for every "Strong Sell" [5][9] Group 2 - The Zacks Rank, a proprietary stock rating tool, is a more reliable indicator of near-term price performance, classifying stocks from Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell) [7][10] - The Zacks Rank is based on earnings estimate revisions, which have shown a strong correlation with near-term stock price movements, unlike the ABR which may not be up-to-date [10][11] - For e.l.f. Beauty, the Zacks Consensus Estimate for the current year has declined by 14.7% to $3.33, leading to a Zacks Rank 5 (Strong Sell) due to analysts' growing pessimism about the company's earnings prospects [12][13]

Group 1: Ulta Beauty - Ulta Beauty has seen its stock decline by 27% over the past year, facing challenges from a shifting economic environment and increased competition [1][3] - In Q3, comparable-store sales increased by only 0.6% year over year, a significant slowdown from the previous year's 4.5% [4] - Despite recent underperformance, Ulta Beauty remains profitable with solid fundamentals and anticipates a robust holiday shopping season, guiding for positive comparable sales and a modestly higher operating margin [5][6] Group 2: e.l.f. Beauty - e.l.f. Beauty has experienced a 55% decline in stock price over the past year but has been successful in democratizing makeup with affordable, professional-grade products [1][8] - The company has maintained an impressive growth record with 24 consecutive quarters averaging over 20% growth, although it faced a slowdown in Q3 of fiscal 2025 with a 31% sales increase compared to an exceptional 85% growth last year [9][10] - e.l.f. Beauty is targeting 27% to 28% revenue growth for full-year 2025, with adjusted EPS around $3.30, reflecting a 4% increase from 2024 [11] - The stock trades at a forward P/E ratio of 22, which is higher than Ulta Beauty's 16, but its stronger growth outlook justifies this premium valuation [12]

e.l.f. Beauty (ELF 4.17%) shareholders have been on a rollercoaster ride over the past few years. The emerging makeup and skincare brand has been stealing market share from industry incumbents thanks to its affordable price points and its social media-savvy marketing strategy. Shares began soaring in mid-2022, gaining more than 700% by the time they reached the peak in mid-2024.Unfortunately, roller coasters don't just go up. Since hitting its peak, e.l.f. stock has tumbled about 66%. While the stock is sti ...