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e.l.f. Beauty (ELF) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of e.l.f. Beauty (ELF - Free Report) ? Shares have been on the move with the stock up 6.3% over the past month. The stock hit a new 52-week high of $113.43 in the previous session. e.l.f. Beauty has gained 99.9% since the start of the year compared to the -0.2% move for the Zacks Consumer Staples sector and the -10% return for the Zacks Cosmetics industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 24, 2023, e.l.f. Beauty reported EPS of $0.42 versus consensus estimate of $0.2 while it beat the consensus revenue estimate by 18.86%.
For the current fiscal year, e.l.f. Beauty is expected to post earnings of $1.82 per share on $727.08 million in revenues. This represents a 9.64% change in EPS on a 25.61% change in revenues. For the next fiscal year, the company is expected to earn $2.17 per share on $825.22 million in revenues. This represents a year-over-year change of 19.33% and 13.5%, respectively.
Valuation Metrics
e.l.f. Beauty may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
e.l.f. Beauty has a Value Score of F. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 60.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 32.9X. On a trailing cash flow basis, the stock currently trades at 64.5X versus its peer group's average of 17.8X. Additionally, the stock has a PEG ratio of 3.04. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, e.l.f. Beauty currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if e.l.f. Beauty passes the test. Thus, it seems as though e.l.f. Beauty shares could still be poised for more gains ahead.
How Does ELF Stack Up to the Competition?
Shares of ELF have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Helen of Troy Limited (HELE - Free Report) . HELE has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Helen of Troy Limited beat our consensus estimate by 6.35%, and for the current fiscal year, HELE is expected to post earnings of $8.80 per share on revenue of $2 billion.
Shares of Helen of Troy Limited have gained 9.9% over the past month, and currently trade at a forward P/E of 12.03X and a P/CF of 10.21X.
The Cosmetics industry is in the top 34% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ELF and HELE, even beyond their own solid fundamental situation.
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e.l.f. Beauty (ELF) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of e.l.f. Beauty (ELF - Free Report) ? Shares have been on the move with the stock up 6.3% over the past month. The stock hit a new 52-week high of $113.43 in the previous session. e.l.f. Beauty has gained 99.9% since the start of the year compared to the -0.2% move for the Zacks Consumer Staples sector and the -10% return for the Zacks Cosmetics industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 24, 2023, e.l.f. Beauty reported EPS of $0.42 versus consensus estimate of $0.2 while it beat the consensus revenue estimate by 18.86%.
For the current fiscal year, e.l.f. Beauty is expected to post earnings of $1.82 per share on $727.08 million in revenues. This represents a 9.64% change in EPS on a 25.61% change in revenues. For the next fiscal year, the company is expected to earn $2.17 per share on $825.22 million in revenues. This represents a year-over-year change of 19.33% and 13.5%, respectively.
Valuation Metrics
e.l.f. Beauty may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
e.l.f. Beauty has a Value Score of F. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 60.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 32.9X. On a trailing cash flow basis, the stock currently trades at 64.5X versus its peer group's average of 17.8X. Additionally, the stock has a PEG ratio of 3.04. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, e.l.f. Beauty currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if e.l.f. Beauty passes the test. Thus, it seems as though e.l.f. Beauty shares could still be poised for more gains ahead.
How Does ELF Stack Up to the Competition?
Shares of ELF have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Helen of Troy Limited (HELE - Free Report) . HELE has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Helen of Troy Limited beat our consensus estimate by 6.35%, and for the current fiscal year, HELE is expected to post earnings of $8.80 per share on revenue of $2 billion.
Shares of Helen of Troy Limited have gained 9.9% over the past month, and currently trade at a forward P/E of 12.03X and a P/CF of 10.21X.
The Cosmetics industry is in the top 34% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ELF and HELE, even beyond their own solid fundamental situation.