Several analysts have updated coverage on e.l.f. Beauty, Inc. (NYSE: ELF) on Thursday after the company reported better-than-expected financial results for the fourth quarter.
Analysts React: Piper Sandler named the stock as a "top pick" and highlighted the company's international growth opportunities and continued strength in the U.S. market after e.l.f. Beauty reported quarterly revenue growth of 71% year-over-year and $321.14 million in sales.
Piper Sandler's Korrine Wolfmeyer highlighted the company's expanding shelf space and noted that she expects profit margins to expand over the next year. The analyst maintained an Overweight rating on the stock and lowered the price target from $216 to $210.
Truist Securities analyst Bill Chappel noted that e.l.f. Beauty has a history of issuing conservative full-year guidance initially and raising the guidance after first-quarter results are more clearly in focus. The company issued full-year revenue guidance in a range of $1.23 billion and $1.25 billion, versus the consensus estimate of $1.27 billion.
Chappel also said e.l.f. Beauty's latest quarterly results represent the 21st consecutive quarter in which the company achieved growth of greater than 20%. Truist maintained e.l.f. Beauty with a Buy rating and price target of $200.
BofA Securities pointed to e.l.f. Beauty's quarterly gross margin of 71%, which the firm attributed to price increases in international markets, lower costs from retailer activity and cost savings. BofA also noted that e.l.f. Beauty achieved the No. 2 rank in mass cosmetics, surpassing L'Oréal Paris, and ended the fourth quarter with 12.8% of total market share.
BofA maintained its Overweight rating on e.l.f. Beauty and lowered its price objective from $230 to $220.
e.l.f. Beauty shares initially dipped in after-market trading Wednesday as investors digested the company's soft forward guidance, but the stock reversed course Thursday and was continuing to trend higher as of the time of writing.
ELF Price Action: According to Benzinga Pro, e.l.f. Beauty shares are up 20.1% at $186.93 at the time of publication Thursday.