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Bull of the Day: e.l.f. Beauty (ELF)

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Stocks are one of the few things that people don’t want to buy when they go on sale. That’s insane when you think about it because most of the other stuff that goes on sale is worth less than you paid for it the minute you write the check. What if I told you that there was a stock out there that is on sale while its earnings are going up? The company is making more money than previously expected but the stock is trading 25% less than highs.

That is exactly the scenario with today’s Bull of the Day, e.l.f. Beauty ((ELF - Free Report) ). The company offers eye, lip, face, face, paw, and skin care products. It sells its products through national and international retailers and direct-to-consumer channels, which include e-commerce platforms in the United States, and internationally primarily through distributors.

The reason that the stock is a Zacks Rank #1 (Strong Buy) is the recent earnings estimate revisions coming from analysts. Over the last sixty days, ten analysts have increased their earnings estimate revision for the current year while nine have done the same for next year. The result is a huge move higher for our Zacks Consensus Estimates for both the current year and next year. Current year estimates have rocketed up from $1.82 to $2.37 while next year’s number is up from $2.17 to $2.76.

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That means that current year EPS growth is forecast to come in at 42.77% while next year’s number is set to be 16.54%. That’s on revenue growth of 64.7% this year and 17.74% next year.

A quick look at the Price, Consensus and EPS Surprise Chart shows the meteoric rise of this stock. That sort of parabolic move scares away some investors. However, the chart here shows that earnings estimates have also pushed higher. Dearnings more than double from early 2022 to mid-2023. From there, onward and upward has been the prevailing trend.


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