E.l.f. Beauty, Inc. (NYSE: ELF) has been generating a lot of buzz in the world of cosmetics and skincare products lately. The holding company, which specializes in e-commerce, national retailers, and international business channels, has been riding high on the success of its popular brands like elf, elf skin, WELL people, and KEYS soulcare. The company’s stock price has surged recently, thanks to the Morgan Stanley analyst team raising their price target outlook for ELF from $75.00 to $94.00 per share.
This significant increase in the target price caused a gap-up before the market opened on Friday, and investors raced to snap up shares causing it to open at $80.75 – an increase from the previous day’s closing price of $78.92. Morgan Stanley currently has an overweight rating on e.l.f.’s stock, meaning they are bullish about its prospects and believe it will outperform its competitors in the coming months.
e.l.f.beauty’s unique business model is paying off for the holding company, as demonstrated by impressive sales figures and rising popularity among customers. Additionally, institutional investors such as Wellington Management Group LLP, Vanguard Group Inc., BlackRock Inc., Millennium Management LLC, and Driehaus Capital Management LLC have expressed their belief in the potential growth of this exciting brand. BlackRock Inc. has increased its holdings in e.l.f.beauty by 17% since last quarter, while Wellington Management Group LLP made an astonishing 3,885.5% increase last quarter alone! Millennium Management LLC now owns almost 682k shares of e.l.f.beauty after buying 6978% more during Q4 2020 when compared with Q3 last year!
As a result, many investors are optimistic about e.l.f. beauty’s future and its ability to maintain market leadership in the cosmetics and skincare industry. The company’s innovative business model is proving to be an attractive prospect, and the increasing popularity of its brands is boosting investor confidence. Institutional investors factor into this outlook with significant investments in this holding company that operates in such an exciting market sector.
However, before making an investment decision, investors should pay attention to a few factors. Firstly, insider trading activity has raised questions about e.l.f.’s future performance and how well it will deliver returns to its investors in the long run. CEO Tarang Amin sold 39,740 shares for approximately $2 million on January 5th, and other insiders have also been selling their stakes in large numbers over the last 90 days.
Secondly, investors should assess e.l.f. Beauty’s financials before making a final decision. The beauty company beat analysts’ estimates and exceeded expectations with its $0.37 EPS report in the last quarter of 2020. However, it’s important to note that earnings per share are expected to come down to 1.02 by the end of this year.
Despite mixed signals regarding insider trading and financials, e.l.f. Beauty has received positive reviews from analysts. Five analysts have rated the company’s stocks as “Hold,” while ten others have assigned a “Buy” rating to it. The consensus rating is currently at “Moderate Buy,” with an average price target of $72. In March 2021, DA Davidson, Truist Financial, and Piper Sandler raised e.l.f. Beauty’s price objective from $50 to $75, or even up to $91 for shares of e.l.f. Beauty in different research notes while issuing this rating.
In conclusion, e.l.f. Beauty is an exciting cosmetics and skincare products company with a unique business model that has proven successful so far. Institutional investors have expressed confidence in this brand, and the increasing popularity of its brands is boosting investor confidence. However, before making an investment decision, investors should pay attention to insider trading activity and the company’s financials. By doing so, they can make an informed decision about whether e.l.f. Beauty is worth investing in or not.
