e.l.f. Beauty defies the stock market with 38% revenue growth despite lofty valuations
e.l.f. Beauty has seen its stock price swing between $49.40 and around $151 in recent months. The company's shares closed at $94.65 on Monday, up 1.45%, even as the Nasdaq fell by over 1%. Behind the scenes, institutional investors are reshaping their positions in the fast-growing beauty brand.
The company's market value now stands at $4.8 billion, following a strong third quarter in fiscal 2026. Revenue jumped 38% to $489.5 million, beating forecasts. Over the past decade, e.l.f. Beauty has maintained a compound annual growth rate of 23%, fuelling investor confidence.
Institutions dominate ownership, holding over 92% of shares. NewEdge Wealth and Verus Capital have both increased their stakes recently. However, Jacobson & Schmitt Advisors cut its position by nearly 32% in Q3 2025, signalling mixed sentiment among major investors.
Trading at a price-to-earnings ratio of over 52, e.l.f. Beauty far exceeds its sector average. Its price-to-book ratio of 9.6 also reflects high expectations. Analysts question whether the implied growth rate of 8.1% is realistic, given these elevated multiples. The company does not pay dividends, leaving investors reliant on stock market gains alone.
The beauty sector remains volatile, yet e.l.f. Beauty continues to outperform broader stock market trends. With institutional shifts underway and lofty valuations, the company's future performance will hinge on sustaining its rapid growth. Investors are watching closely to see if revenue momentum can justify the premium.
