e.l.f. Beauty, Inc. (ELF): what the price requires
At today's price, e.l.f. Beauty, Inc. (ELF) is priced for today's economics sustained for ~7.1 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Source: https://boothcheck.com/report/ELF
Headline
| Field | Value |
|---|---|
| Ticker | ELF |
| Company | e.l.f. Beauty, Inc. |
| Current price | $74.63/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Must persist for | 7.1y |
| Multiple paid | 32x operating income |
Solve inputs: computed at a 9.6% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.9 years.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | -0.09σ |
| cohort percentile (of 69 peers) | 80 |
| sustained it ~7.1 years at this level | 31% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 10.57x | 2 | expensive |
| Earnings | 12.13x | 4 | expensive |
| Relative | 2.74x | 3 | expensive |
| Growth | 0.85x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.3%); the inversion above states its own rate.
Per-Model Detail (n=12)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $127.71 | 0.58x | yes | FCF base $0.2B, growth 24% (input: historical growth), terminal g 4.0%, WACC 8.3%, 7yr projection |
| DCF Exit Multiple | Growth | $87.63 | 0.85x | yes | Exit EV/EBITDA: 57.0x / 59.0x / 61.0x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $27.19 | 2.74x | yes | P/E 48.4x (blended: static sector reference 22x + trailing (TTM) 171x), scenarios: 39.2x / 48.4x / 57.6x (bear / base = reference held flat / bull), EV/EBITDA 27.5x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $4.73 | 15.78x | yes | BV/sh $18.78, ROE (TTM) 2.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $2.70 | 27.64x | yes | 5yr excess ROE then converge to ke=9.3% (excluded from median) |
| Discounted Future Market Cap | Growth | $76.56 | 0.97x | yes | Rev $1.6B, growth 24% (input: historical growth; tapered), Terminal P/S: 2.2x / 2.7x / 3.3x (bear / base = today's held flat / bull, cap 12x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $3.79 | 19.69x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.10B × (1−21%) / WACC 8.3% → EPV (no growth) |
| Residual Income | Asset | $1.98 | 37.69x | yes | BV $18.78 + 5yr PV of (ROE (TTM) 2.3% − Kₑ 9.3%) × BV; BV grows 1.5%/yr (excluded from median) |
| Graham Number | Asset | $13.94 | 5.35x | yes | √(22.5 × EPS $0.46 × BVPS $18.78) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $9.74 | 7.66x | yes | EBITDA $0.09B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $23.68 | 3.15x | yes | FCF $190.1M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $8.07 | 9.25x | yes | SBC-adj FCF $0.10B (FCF $0.19B − SBC $0.09B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $0.39 | 191.36x | yes | EPS $0.46 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $54.38 | 1.37x | yes | Revenue $1.64B × sector P/S 2.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $4.97 | 15.02x | yes | EPS $0.46 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $552.0m |
| Net debt / NOPAT (after-tax) | 4.39x |
| Net debt / operating income (pre-tax) | 3.47x |
| Share count CAGR (dilution) | 2.8% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- e.l.f. trades around $64.22, which prices in roughly 28 times company-wide operating income and about six years of operating growth held near the self-funding ceiling. The near-term rate is within what the company has recently delivered; the stretch is in how long that pace must persist, and that is a more reasonable bet than the headline multiple first suggests.
- The acquisition of Rhode reshaped the story. Rhode added roughly 34 percentage points to fourth-quarter fiscal 2026 growth, delivered over $500 million in annualized global retail sales and about $390 million in net sales up more than 80 percent, and became the number one beauty brand in Sephora North America. The bet now spans mass color cosmetics and a fast-scaling prestige brand.
- The governing risk is cost, not demand. About 75 percent of e.l.f.'s product volume is made in China, where U.S. cosmetics imports face a 55 percent tariff, and the company is both relocating supply and walking back some of last year's price increases. Fiscal 2027 guidance of $3.27 to $3.32 in adjusted EPS landed below the $3.62 the Street wanted, which is the margin squeeze made explicit.
Bull Case
Beauty is a sector where valuation is unusually hard to anchor, because the durable winners earn multiples that no static earnings frame can justify and the losers fade faster than any DCF predicts. The whole question is whether a brand owns a habit or rents attention. e.l.f. has spent a decade building the case that it owns the habit: it took mass color cosmetics share by selling prestige-quality formulas at drugstore prices, and it did it while staying profitable, with free cash flow near $190 million on roughly $1.6 billion of revenue. That is the lens that matters here, and on it e.l.f. fits the winner pattern rather than breaking it.
The fiscal 2026 fourth quarter showed the engine still running and then some. Sales rose about 35 percent to $449 million and adjusted EPS of $0.32 beat the $0.29 consensus, with the newly acquired Rhode brand contributing roughly 34 percentage points of that growth. Rhode is the proof that e.l.f.'s playbook travels upmarket: on an annualized basis it delivered over $500 million in global retail sales and about $390 million in net sales, grew net sales more than 80 percent, and reached the number one beauty-brand rank in Sephora North America. The company has historically improved gross margin through product mix, pricing, and supply-chain cost reductions (ELF FY2025 10-K, accession 0001600033-25-000016), and Rhode shifts the mix toward higher-priced prestige, which is structurally accretive if the brand holds.
The valuation pattern is telling. Of the full method set, only the growth-DCF family reaches the current price, while the asset, earnings-power, and peer-multiple frames all read richly valued. That is the signature of a business the static models cannot price, because their inputs assume the compounding stops. Against the peer cohort of high-growth consumer names like Celsius and Monster, e.l.f.'s priced-in assumption reads within range, not stretched. The bull case is simply that a brand portfolio compounding sales in the mid-thirties percent, now with a prestige flywheel attached, is worth paying a forward multiple for, and the market is not yet demanding the impossible.
Bear Case
The bear case is moat erosion, and it is showing up first in the one place a low-cost disruptor cannot afford it: the cost line. e.l.f.'s entire edge was prestige quality at mass prices, an edge built on a China-concentrated supply chain. About 75 percent of product volume is manufactured in China, and U.S. cosmetics imports from China now carry a 55 percent tariff. The company's own filings flagged this years ago, noting the series of U.S. tariff lists covering Chinese-origin products and warning of the potential impact on cost of sales (ELF FY2025 10-K, accession 0001600033-25-000016). The defensible advantage, the price-quality gap, is being chipped away by a cost structure the company does not control, and relocating production to other countries takes time it does not have in fiscal 2027.
The response makes the squeeze concrete. e.l.f. raised prices by about a dollar last August to offset tariffs and is now planning to walk some of that back amid a consumer pullback and high gas prices. That is the worst of both worlds: higher input costs and less pricing power to recover them. It shows in guidance. Fiscal 2027 adjusted EPS of $3.27 to $3.32 came in below the $3.62 the Street modeled, and the revenue range of $1.835 billion to $1.865 billion also undershot. Management expects Rhode to contribute only about 9 percentage points to fiscal 2027 growth, a sharp deceleration from the 34 points it added in the fourth quarter, so the acquisition tailwind is already fading as a growth driver.
Underneath the adjusted numbers, the reported economics are thinner than the headline implies. Trailing operating income on the EDGAR basis is about $74 million, well below the roughly $195 million the price basis reads, and the gap between those two measurement bases is itself a caution. Stock-based compensation is heavy enough that capitalizing free cash flow net of it cuts the implied value roughly in half. The fourth quarter posted a GAAP loss even as sales surged, the legacy of acquisition and integration costs. Analyst sentiment has caught up to the tension: B. Riley cut its target to $70 from $130 while keeping a buy, and the average target has fallen about 17 percent in three months. The growth is real, but the moat depends on a cost advantage that tariffs are actively eroding, and the price still asks for six years of uninterrupted compounding.
Valuation
The inversion is the cleanest read here. At $64.22 (June 27, 2026) the price embeds roughly 28 times company-wide operating income and solves to operating growth held near the self-funding ceiling for about six years at a 9.6 percent cost of capital. The notable feature is that the near-term rate is within what e.l.f. has recently delivered, so the bet is on duration rather than an implausible pace. About 34 percent of comparable fast-growers sustained that level of compounding for six years, which is why the priced-in assumption reads within range rather than demanding.
The X-ray explains why the methods scatter so widely. The growth-DCF family is the only one that reaches the price: perpetual-growth DCF lands near $132 and the discounted future market cap near $66, both leaning on roughly 24 percent historical revenue growth. Every static frame sits well below. The peer-multiple read is about $25.63 on a blended P/E that mixes a 22 times sector level against a 147 times trailing multiple. The asset family collapses to single digits because trailing ROE is only about 2.3 percent against a 9.3 percent cost of equity, so excess-return and residual-income methods produce floors near $2 to $5. Earnings power value lands near $4 on normalized EBIT.
The honest synthesis is that this is not a value setup and not an obvious bubble. The inversion centers near the price, the durability requirement is moderate, and the disagreement among methods is the information: pay the forward multiple only if you believe the brand portfolio compounds through the tariff cost shock. The reported-versus-record operating-income gap and the heavy stock-based compensation are the two reasons to discount the rosier free-cash-flow reads. The premium is for the moat holding, and the moat is precisely what the cost structure is testing.
Catalysts
The fiscal 2026 fourth-quarter print on May 20 was the most recent catalyst and a mixed one. Sales rose about 35 percent to $449 million and adjusted EPS of $0.32 beat the $0.29 consensus, but the company posted a GAAP loss and, more importantly, set fiscal 2027 guidance below the Street: adjusted EPS of $3.27 to $3.32 against a $3.62 estimate and revenue of $1.835 billion to $1.865 billion against roughly $1.866 billion expected. The next earnings report is the test of whether the tariff mitigation is tracking and whether Rhode's deceleration to about a 9 percentage-point contribution holds or worsens.
The dominant catalyst is the tariff and sourcing situation. With about 75 percent of volume made in China and a 55 percent import tariff in force, e.l.f. is working with suppliers to shift production to other countries and expects China to account for significantly less of output by the end of fiscal 2026. Progress on that relocation, and the decision to walk back some of last year's price increases amid a consumer pullback, are the swing variables for the margin trajectory. Watch also for Rhode's continued retail expansion after record launches with Sephora in the U.K. and Mecca in Australia and New Zealand, and for further analyst repositioning after B. Riley cut its target to $70 from $130 and the average target fell about 17 percent in three months.
Sources: StockTitan ELF Q4 FY2026, CNBC tariff price walk-back, Yahoo Finance Rhode performance, QuiverQuant tariff cost pressure.
Peer Cohorts (Per Segment, With Filing Citations)
e.l.f. Beauty (consolidated) (reported)
- COTY (COTY INC.)
- (no filing in the citation store)
- IPAR (INTERPARFUMS, INC.)
- (no filing in the citation store)
- OLPX (OLAPLEX HOLDINGS, INC.)
- (no filing in the citation store)
- EL (Estee Lauder Companies Inc)
- (no filing in the citation store)
- KVUE (Kenvue Inc.)
- (no filing in the citation store)
- CHD (CHURCH & DWIGHT CO., INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.