Core Viewpoint - TD Cowen analyst Oliver Chen has lowered the price target on Elf Beauty (ELF) to $100 from $110 while maintaining a Buy rating on the shares [1] Group 1: Price Target Adjustment - The price target for Elf Beauty has been reduced to $100 from $110 [1] - The firm updated its estimates following Q3 results [1] Group 2: Growth Expectations - Core growth is expected to normalize to low single digits (LSD%) in the second half of the year [1] - This normalization may keep shares range-bound in the near term [1]

Investment Rating - The report maintains a positive outlook on e.l.f. Beauty, raising the full-year net sales growth guidance from 18%-20% to 22%-23% due to the strong contribution from the Rhode acquisition [2][9]. Core Insights - e.l.f. Beauty achieved a 38% year-over-year increase in net sales for FY26Q3, reaching $489.5 million, with the Rhode acquisition contributing approximately $128 million [2][9]. - The core organic net sales growth was only about 2%, which is below expectations, primarily due to short-term softness in key international markets like the UK and Germany [2][9]. - The company has adjusted its global consumption growth expectation down to 6% from 8%, reflecting a marginal weakening in the broader consumer environment [2][9]. - The adjusted EBITDA rose by 79% to $123 million, representing 25% of net sales, indicating strong operational performance [2][9]. Performance Summary - e.l.f. Beauty has achieved year-over-year net sales growth for 28 consecutive quarters, positioning it among the few publicly-listed companies in the consumer sector capable of sustaining such prolonged high growth [2][9]. - The strong performance is driven by an excellent brand portfolio strategy, particularly the significant contribution from Rhode, alongside organic growth from the core business through a value proposition of premium quality at accessible pricing [2][9]. Cost Structure and Profitability - The gross margin in FY26Q3 decreased by 30 basis points to 71%, mainly due to higher tariff costs, partially offset by pricing and product mix optimization [3][10]. - The ratio of selling, general, and administrative (SG&A) expenses to net sales declined from 54% to 51%, benefiting from improved marketing spend efficiency [3][10]. - Marketing and digital investment as a percentage of net sales decreased from 27% to 21%, but is expected to rebound to around 27% in the second half of the fiscal year due to increased investment in major brand campaigns [3][10]. Brand Performance - The e.l.f. Cosmetics brand saw an 8% year-over-year increase in U.S. consumption, significantly outpacing the overall color cosmetics category growth of 4% [4][11]. - The company has established a dominant 22% market share in the face makeup segment, with significant growth potential remaining in lip and eye categories [4][11]. - Acquired brands like Rhode have achieved record launches in Sephora, and Naturium and e.l.f. SKIN have outperformed the overall U.S. skincare category growth [4][11]. Innovation and Marketing - e.l.f. continues to drive product innovation through community insights, with new products priced competitively against high-end counterparts [5][12]. - Breakthrough marketing campaigns have generated over 4 billion impressions, showcasing the company's effective marketing strategies [5][12]. International Market Potential - International sales currently account for approximately 20% of total sales, indicating substantial growth potential compared to the industry average of over 70% [6][13]. - The company has established a comprehensive distribution network in Germany and is expanding its presence in premium markets like Australia/New Zealand with the Rhode brand [6][13].

Investment Rating - The report maintains a positive outlook on e.l.f. Beauty, indicating an upgrade in full-year net sales growth guidance from 18%-20% to 22%-23% due to the strong contribution from the Rhode acquisition [2][9]. Core Insights - e.l.f. Beauty reported a 38% year-over-year increase in net sales for FY26Q3, reaching $489.5 million, with the Rhode acquisition contributing approximately $128 million [2][9]. - The core organic net sales growth was only about 2%, which is below expectations, primarily due to short-term softness in key international markets like the UK and Germany [2][9]. - The company has adjusted its global consumption growth expectation down to 6% from 8%, reflecting a marginal weakening in the broader consumer environment [2][9]. - Adjusted EBITDA rose 79% to $123 million, representing 25% of net sales, showcasing the company's ability to maintain strong performance over 28 consecutive quarters of year-over-year net sales growth [2][9]. Financial Performance - Gross margin for FY26Q3 decreased by 30 basis points to 71%, mainly due to higher tariff costs, but was partially offset by pricing and product mix optimization [3][10]. - Selling, general, and administrative (SG&A) expenses as a percentage of net sales decreased from 54% to 51%, attributed to improved marketing efficiency and timing shifts of some expenses [3][10]. - The company reported a net income of $39.4 million and an adjusted net income of $74.5 million, with diluted earnings per share at $0.65 and adjusted diluted earnings per share at $1.24 [3][10]. Brand and Market Dynamics - e.l.f. Cosmetics brand achieved an 8% year-over-year increase in U.S. consumption, significantly outpacing the overall color cosmetics category growth of 4% [4][11]. - The company has established a dominant 22% market share in the face makeup segment, with substantial growth potential in lip and eye categories [4][11]. - The Rhode brand has set records for the largest brand launch in Sephora's history in North America and the UK, indicating strong market acceptance [4][11]. Innovation and Marketing Strategy - e.l.f. continues to leverage community insights for product innovation, with new products priced competitively against high-end counterparts, generating positive feedback [5][12]. - Marketing initiatives, including collaborations and campaigns, have resulted in over 4 billion impressions, showcasing the effectiveness of their marketing strategy [5][12]. International Market Potential - International sales currently account for about 20% of total sales, indicating significant growth potential compared to the industry average of over 70% [6][13]. - The company has established a comprehensive distribution network in Germany and is expanding its presence in Australia/New Zealand with the Rhode brand [6][13]. - Despite short-term pressures in the UK market, the company is implementing strategies to strengthen its value proposition and enhance brand awareness [6][13].

Core Viewpoint - E.l.f. Beauty's stock experienced a significant reversal despite strong fiscal Q3 results, presenting a potential buying opportunity for investors [1]. Financial Performance - E.l.f. Beauty reported a 38% year-over-year increase in sales for fiscal Q3, reaching $489.5 million, surpassing the analyst consensus of $460 million [3]. - Adjusted earnings per share (EPS) rose 68% from $0.74 to $1.24, exceeding the analyst consensus of $0.72 [3]. - Adjusted EBITDA increased by 79% to $123 million [3]. Market Position and Growth - The company achieved a gross margin of 65.91% and organic growth, excluding the acquisition of Rhode, was 2% [5]. - Total consumption grew by 6%, with an 8% increase in the U.S. market [5]. - E.l.f.'s namesake brand gained 130 basis points in market share within the mass cosmetics sector during the quarter [5]. Revenue Breakdown - U.S. revenue increased by 36%, while international revenue rose by 44%, although weak consumption was noted in the U.K. [6]. - Rhode contributed $128 million in revenue for the quarter, aided by its launch at Sephora [5]. Future Outlook - E.l.f. raised its full-year fiscal 2026 guidance, now expecting sales growth of 22% to 33%, up from a previous estimate of 18% to 20% [6]. - Updated fiscal 2025 outlook includes net sales of $1.6 billion to $1.612 billion, adjusted EBITDA of $323 million to $326 million, and adjusted EPS of $3.05 to $3.10 [7]. Expansion Plans - The company plans to launch Rhode in Australia and New Zealand and introduce its Naturium brand into Walmart in the U.S. this spring [8]. - E.l.f. will also increase shelf space for its brand at Ulta Beauty and launch at DM in Germany [8]. Investment Consideration - E.l.f. is currently trading at a forward price-to-earnings ratio of 22 and a price/earnings-to-growth (PEG) ratio of 0.4, indicating it may be undervalued [10].

Core Viewpoint - The nostalgia for 2016 among Gen Z is expected to drive a new boom cycle in the beauty industry, particularly benefiting companies like e.l.f. Beauty and Ulta Beauty [1] Group 1: Industry Trends - Gen Z's current social media trend involves sharing photos from 2016, indicating a longing for that era when social media was less commercialized [1] - The year 2016 is identified as a peak time for bold makeup styles, which contrasts with the subsequent trend of "no-makeup makeup" [1] Group 2: Company Impact - Companies such as e.l.f. Beauty and Ulta Beauty are positioned to benefit from this nostalgia-driven trend, potentially leading to increased sales and market interest [1] - The anticipated "supercycle" in beauty products, especially makeup, suggests a significant opportunity for growth for these companies [1]

Core Insights - The market perception of e.l.f. Beauty has shifted from viewing it as a strong growth story to a more cautious stance [1] Company Analysis - e.l.f. Beauty was previously considered a company with a compelling growth narrative, indicating strong potential in the beauty industry [1]

Financial Performance - Net sales increased by $134.2 million, or 38%, to $489.5 million for the three months ended December 31, 2025, compared to $355.3 million for the same period in 2024, driven by the rhode acquisition and growth in both e-commerce and retailer channels [115]. - Gross profit rose by $94.2 million, or 37%, to $347.5 million for the three months ended December 31, 2025, with a gross margin of 71%, slightly down from 71.3% in the previous year due to tariffs [116]. - Net income for the three months ended December 31, 2025, was $39.4 million, representing an increase from $17.3 million in the same period of 2024, with an effective tax rate of 26.9% [120]. - For the nine months ended December 31, 2025, net sales increased by $206.3 million, or 21%, to $1,187.2 million, with the rhode acquisition contributing $180.6 million to this growth [121]. Expenses - Selling, general and administrative (SG&A) expenses increased by $61.7 million, or 28%, to $280.0 million for the three months ended December 31, 2025, primarily due to higher marketing and compensation costs [117]. - SG&A expenses for the nine months ended December 31, 2025, were $706.9 million, an increase of $122.0 million, or 21%, from the previous year, driven by marketing and distribution costs [125]. Acquisition - The rhode acquisition on August 5, 2025, was completed for a purchase price of $897.5 million, funded through a combination of cash, equity, and potential earnout [110]. - Net cash used in investing activities for the nine months ended December 31, 2025, was $603.0 million, primarily related to the rhode Acquisition and capital expenditures [137]. Cash and Liquidity - As of December 31, 2025, the company had $196.8 million in cash and cash equivalents, along with a borrowing capacity of $243.3 million under its Amended Revolving Credit Facility [129]. - The unused balance of the Amended Revolving Credit Facility as of December 31, 2025, was $243.3 million [132][149]. - The company anticipates funding ongoing cash needs from existing cash, cash generated from operations, and if necessary, draws on the Amended Revolving Credit Facility [130]. - The company expects to meet its planned operating, investing, and financing needs for the next twelve months through operating cash flow and available financing [132]. Interest and Debt - Interest expense, net increased to $12.4 million for the three months ended December 31, 2025, compared to $3.5 million in the same period of 2024, largely due to increased debt from the Fifth Amendment to the Amended Credit Agreement [119]. - The interest rate for the Term Facility as of December 31, 2025, was approximately 5.9%, while the interest rate for the Revolving Credit Facility was approximately 5.8% [149]. Operational Strategy - The company raised prices globally for all products sold as of August 1, 2025, to mitigate risks associated with ongoing tariff exposure [108]. - The company has made significant investments in infrastructure, digital capabilities, and expansion to new retailer locations [130]. - The Fourth Amendment to the Amended Credit Agreement established a revolving credit facility of $500.0 million, available for working capital and acquisitions [144]. Working Capital - As of December 31, 2025, working capital, excluding cash and cash equivalents, was $250.5 million, an increase from $214.8 million as of March 31, 2025 [131]. - For the nine months ended December 31, 2025, net cash provided by operating activities was $110.1 million, compared to a net cash used of $2.3 million for the same period in 2024 [134][136]. - Net cash provided by financing activities for the nine months ended December 31, 2025, was $540.9 million, mainly driven by proceeds from the Fifth Amendment establishing the Term Facility [138].

Core Insights - Hailey Bieber's skin care line, Rhode, is significantly boosting e.l.f. Beauty's sales, with net sales reaching $212 million in less than three years [1] - Despite a strong quarterly performance, e.l.f. Beauty's stock has declined approximately 8% over the past year, indicating skepticism from Wall Street [2] - JPMorgan analyst Andrea Teixeira raised concerns about a slowdown in organic growth, projecting it to drop to 2% in the latter half of the year, primarily due to reliance on the Rhode acquisition [3] Group 1: Business Performance - CEO Tarang Amin believes the recent shipment and demand discrepancies are due to accounting issues rather than a decline in popularity [4] - The company's growth strategy is supported by two main factors: the high-end appeal of Rhode and its strong presence in low-income markets through Dollar General [5][6] - e.l.f. Beauty is attracting new customers, with 60% of Dollar General shoppers being first-time cosmetic buyers, indicating a successful penetration into the value segment [6] Group 2: Market Position and Consumer Base - Amin expresses confidence in maintaining the company's growth streak, which has lasted for 28 quarters, due to a loyal customer base among Gen Z and millennials [7] - The brand's ability to resonate across various income groups is seen as a key strength, especially in the current inflationary environment [7]

Company Overview - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team operates from key finance and investing hubs including London, New York, Toronto, Vancouver, Sydney, and Perth [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The content includes insights across various sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Utilization - Proactive is a forward-looking company that adopts technology enthusiastically to enhance workflows [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

分组1 - The software stock market is experiencing a significant sell-off, particularly affecting companies like Qualcomm and ARM Holdings, which are facing challenges due to a global memory chip shortage [2][3][4] - Qualcomm's guidance indicates weakness in the smartphone market, with expectations of this dynamic persisting into 2027, suggesting management should have better prepared investors for these challenges [2][4] - ARM Holdings is also struggling with subdued royalty sales as mobile processor sales stall, indicating a need for improved investor communication [3][4] 分组2 - Alphabet's capital expenditure (capex) guidance for the year is projected at $185 billion, significantly higher than the market's expectation of $120 billion, reflecting a strong long-term business outlook [5][6] - Despite concerns over capex, Alphabet's fundamentals remain robust, with YouTube seeing a 75% increase in podcast viewership and the Gemini app achieving 750 million monthly active users [6][7] - Alphabet's strong performance in AI and cloud growth positions it favorably in the tech landscape, contrasting with the struggles of other software companies [10][12][13] 分组3 - E.L.F. Beauty reported a 38% increase in net sales and a 79% rise in adjusted EBITDA, driven by the acquisition of Haley Bieber's cosmetics brand, Road [36][37] - The brand Road has shown exceptional growth, achieving $212 million in net sales in under three years, indicating strong consumer demand and effective marketing strategies [39][40] - E.L.F. Beauty continues to gain market share, with its core business showing healthy growth despite shipment challenges, suggesting a positive long-term outlook [47][49]