e.l.f. Beauty, Inc. (NYSE:ELF) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The market may be pricing in some blue sky too, with the share price gaining 15% to US$104 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
After this upgrade, e.l.f. Beauty's 13 analysts are now forecasting revenues of US$723m in 2024. This would be a sizeable 25% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 23% to US$1.42. Before this latest update, the analysts had been forecasting revenues of US$638m and earnings per share (EPS) of US$1.31 in 2024. The forecasts seem more optimistic now, with a solid increase in revenue and a small increase to earnings per share estimates.
It will come as no surprise to learn that the analysts have increased their price target for e.l.f. Beauty 11% to US$107 on the back of these upgrades. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on e.l.f. Beauty, with the most bullish analyst valuing it at US$121 and the most bearish at US$87.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the e.l.f. Beauty's past performance and to peers in the same industry. It's clear from the latest estimates that e.l.f. Beauty's rate of growth is expected to accelerate meaningfully, with the forecast 25% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 15% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that e.l.f. Beauty is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at e.l.f. Beauty.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for e.l.f. Beauty going out to 2026, and you can see them free on our platform here..
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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