Canaccord Genuity analyst Susan Anderson has maintained their bullish stance on ELF stock, giving a Buy rating yesterday.
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Susan Anderson’s rating is based on the potential growth opportunities for e.l.f. Beauty, particularly through its recent acquisition of Rhode Beauty. Despite some initial concerns about Rhode’s growth rate and margins, Anderson sees significant potential in the brand’s expansion into new markets and product lines. The recent sales growth, attributed to the pipeline into Sephora, suggests strong demand, and there is optimism about Rhode’s ability to expand its gross margin closer to that of prestige peers.
Furthermore, the pro-forma financial details released for Rhode indicate promising sales and profitability metrics, with an EBIT margin that is expected to be accretive to e.l.f. Beauty’s overall performance. While there are adjustments to sales and earnings estimates, the overall outlook remains positive, supported by strong site traffic and in-store performance at Sephora. The expansion into international markets, such as Sephora UK, and the potential for further growth in Western Europe, bolster the confidence in e.l.f. Beauty’s future prospects, justifying the Buy rating.
According to TipRanks, Anderson is a 5-star analyst with an average return of 17.7% and a 45.23% success rate. Anderson covers the Consumer Cyclical sector, focusing on stocks such as Ulta Beauty, Olaplex Holdings, and Sally Beauty.
In another report released yesterday, Piper Sandler also maintained a Buy rating on the stock with a $150.00 price target.