With tech and AI being the top stocks, e.l.f Beauty Inc. (ELF  ) has emerged as an unlikely contender, witnessing a surge in its stock price, outperforming even the most dominant players in the tech and AI sectors.

Back in 2020, if you had invested in e.l.f Beauty with the price of just one of its foundations, you'd be sitting on a remarkable $200 profit today.

E.l.f Beauty, renowned for its affordable makeup offerings found in drugstores, has experienced remarkable growth. In 2023 alone, the company reported $270.94 million in revenue, marking an impressive 84.9% surge from the previous year. Additionally, its net sales saw an 85% uptick.

In the past five years, the stock price has increased more than 2,600%

What sets e.l.f Beauty apart is its budget-friendly pricing - where products can be snagged for under $20, with some even under $5. Many have compared e.l.f beauty products to be similar to luxury products for a fraction of the cost.

Additionally, e.l.f Beauty boasts a commitment to offering 100% vegan and cruelty-free products, which resonated strongly with young consumers and contributed to the brand's success.

While the beauty industry as a whole has experienced significant growth in recent years - surpassing $579 billion - not all brands see success. Estee Lauder Companies Inc. (EL  ), for instance, has struggled, witnessing a 4% decline in the past five years. Despite reporting revenue of $4.28 billion in Q4 of 2023, it saw a 7% decrease from the prior year's $4.62 billion.

Estee Lauder Companies Inc, the parent company of brands like Clinique, M·A·C and Bobbi Brown, spans the spectrum from high-end luxury to more affordable options.

Yet, even within its portfolio, there are disparities in performance. While brands like M·A·C and Clinique have seen revenue growth, others like Estée Lauder, Tom Ford and La Mer have struggled to maintain momentum.

Beauty retailers such as Ulta Beauty Inc. (ULTA  ), for example, saw a comparatively modest 73% increase in its stock price over the same period. LVMH (LVMUY  ), parent company of many top luxury brands, saw a 176% increase in its stock price.

As the beauty industry undergoes rapid evolution and transformation, e.l.f Beauty continues to see strong success in their brand approach.