ELF Beauty as a Turnaround Bet with Limited Holding Period
"Now the second one which I talked about many times is Elf Beauty. ELF is down 40% over the last even two or three days. It was a $120 stock on Wednesday. Now it's at $73 per share. I think it's a good turnaround bet. But I personally would not keep the company more than one to two years after the road acquisition keeps growing then road will peak and then you're going to have to acquire another one and maybe I would not keep it more than two years."
The speaker discusses ELF Beauty's recent price drop and turnaround potential. While acknowledging the short-term improvements driven by acquisitions, he cautions against long-term holding due to concerns over sustainable organic growth, suggesting a holding period of one to two years.
Elf Beauty's Mixed Reaction Post-Earnings Despite Expansion Plans
"Elf Beauty. Uh it had a really tough Thursday. It tumbled 35% after the earnings. Today we're seeing a reversal here. Shares rose as much as 10%. The company announced expansion in UT Beauty Mexico. The company has been growing through all those chains. Uh UT Beauty, Sephora. There was of course a lot of excitement for the acquisition of Haley Bieber's brand and that was kind of a whole new identity. Analysts were so excited. There were there was like a few weeks of really big rally but now what we saw after earnings was a pretty big disappointment. The company is down 37% year to date. It's been growing internationally and in the US. So perhaps this expansion in Mexico is one reason investors are really excited."
Elf Beauty experienced significant volatility after earnings, dropping 35% initially, then showing a short-term recovery of up to 10%. Despite recent international expansion, especially in Mexico, the stock remains under pressure with a 37% YTD decline, resulting in cautious investor sentiment.
ELF Beauty: Flatout Buy at Discount Prices
"ELF came through with a big boy buy for ELF here today. That stock should have been down 5 to 15% given the missed revenue estimates, not 35% as the market reacted. People sold ELF just a few months ago at $49, and now it's at $76, meaning massive regret for those who sold. This irrational sell-off presents a flatout buying opportunity with significant upside."
The speaker highlights that the drastic 35% drop in ELF Beauty is overdone relative to fundamentals, making the current price an attractive entry point with strong potential for appreciation.
Elf Beauty Disappoints After Earnings Miss
"Yeah, that's I I don't know how to connect it as well, but the loss there is much bigger. We can say that for sure. Shares of Elf Beauty fell as much as 24% in pre-market trading. The last time we really talked so much about El Beauty was when they signed that deal with Haley Bieber. There was so much enthusiasm. Uh the stock soared. was kind of a almost like a new era uh and a lot of optimism. Now we're seeing uh the opposite uh part of this uh company fular outlook for adjusted earnings per share disappointed net sales as well missed analyst estimates they're positive about sales growth uh but there were perhaps a really high bar and high expectation about road which is Haley Bieber's brand so there is some disappointment there uh the company had passed on giving investors uh outlook in the last quarter this time they gave about 1.55 5 billion uh to 1.57 billion and earnings about $280 um cents per share. Uh this uh we've seen some growth. This is mostly thanks to the growth in both retail and e-commerce channels, but that's it. It's having a really bad year uh despite the deal that brought so much optimism for this company. But we can see after earnings, it's clearly falling apart pretty fast."
The commentary focuses on Elf Beauty's steep pre-market decline of 24% and disappointing earnings results. Despite past enthusiasm driven by a high-profile deal, the company's outlook on adjusted earnings and net sales has missed expectations, signaling mounting concerns for the stock's near-term performance.
Commentary on E.L.F. Beauty (ELF) Under Pressure
"We're looking at shares of E.L.F. Beauty. That's ticker ELF. We're seeing shares tumbling for double-digit losses earlier down as much as 34%. This is the worst day that the company has seen in seven years. Uh but I mean, of course, if you look on a year-to-date basis, we're also seeing the stock down about 38%. But essentially, the company cut its fullear outlooks for adjusted EPS and net sales. Analysts are still saying that they remain positive about Road, which we know Haley Bieber, wife of Justin Bieber, has a makeup line called Road, but they do see weakness in terms of their actual products."
The speaker details the recent poor performance of E.L.F. Beauty, noting double-digit losses and missed EPS/net sales guidance, while also mentioning mixed sentiment due to a supportive partnership despite underlying product weaknesses.
Skeptical View on Elf Beauty's Namesake Product
"And one more you want to squeeze in. All right, I'll do Elf Beauty. Okay, Elf, because it's down 21%. Earning sales outlooks fell short, right? So they're positive about the sales growth because they just acquired road. Right. That's Hailey Bieber's beauty brand. But they're still skeptical about the namesake product, the elf beauty that you see in a CVS pharmacy or whatever. They're kind of skeptical about that."
The commentary on Elf Beauty (ELF) notes that the stock is down 21% with earning sales outlooks that missed expectations. While the acquisition of the Road brand is seen as a positive for sales growth, there is significant skepticism regarding the performance of its namesake product.