e.l.f. Beauty’s 50% stock plunge sparks debate over long-term potential
e.l.f. Beauty has drawn investor attention despite recent stock market struggles. The company’s stock has plummeted over 50% from its 2024 peak, yet its long-term growth remains robust. With 27 consecutive quarters of rising sales and a devoted customer base, some see this as a stock market buying opportunity rather than a setback.
The brand has cultivated a reputation as a low-cost leader in cosmetics. Its average product price is $7.50, undercutting rivals who charge around $9.50 for similar items. This pricing strategy hasn’t compromised profitability—over the past five years, e.l.f. Beauty has maintained an 11% operating margin and a 9% profit margin.
Production heavily relies on manufacturing in China, which has presented challenges. Recent tariff changes have squeezed margins, adding pressure to the company’s financials. Still, management forecasts 18% to 20% revenue growth for the current fiscal year, demonstrating confidence in its market position. The company’s consistent performance has won over some investors. One analyst, whose household regularly uses e.l.f. products, finds the investment case compelling. They argue that backing familiar brands can help weather stock market downturns and reduce the temptation to sell during tough periods. For now, no major consortia or financial firms hold a reported stake in the business. With trailing 12-month revenue reaching $1.4 billion, e.l.f. Beauty continues to capture market share from larger competitors. The analyst plans to consider adding the stock to their portfolio in 2026, betting on its ability to recover and expand further.
e.l.f. Beauty’s mix of affordability, steady growth, and brand loyalty sets it apart in a competitive industry. While tariffs and stock market swings pose risks, the company’s track record and ambitious targets keep it on investors’ radars. The coming year will test whether its strategy can turn recent losses into long-term gains.
