7. e.l.f. Beauty, Inc. (NYSE:ELF)
Analyst Upside: 55.15%
Number of Hedge Fund Holders: 35
e.l.f. Beauty, Inc. (NYSE:ELF) is a multi-brand beauty company that ranks on our list because of its clean, vegan, cruelty-free, and accessible cosmetics and skincare products. Its brand portfolio includes e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Well People, and Keys Soulcare. The company’s operations span eye, lip, face, makeup, beauty tools, accessories, and skincare products, all 100% vegan.
Fiscal Q3 2025 marked the company’s 24th consecutive quarter of net sales growth and market share gains, ranking e.l.f. Beauty, Inc. (NYSE:ELF) among a rarefied group of high-growth companies. It is one of the only six public consumer companies out of 546 that has grown for 24 straight quarters and averaged at least 20% sales growth per quarter. Furthermore, e.l.f. is the only brand among nearly 1,000 cosmetics brands tracked by Nielsen to gain share for 24 consecutive quarters.
In addition, fiscal Q3 2025 marked another quarter of consistent category-leading growth for the company. Its net sales grew by 31% and it delivered $69 million in adjusted EBITDA. e.l.f. Beauty, Inc. (NYSE:ELF) also grew its US market share by 220 basis points. The company’s fiscal H2 2025 outlook anticipates a 14% to 16% net sales growth on top of the 77% growth it delivered in the second half of last year. It ranks seventh on our list of the 10 best vegan stocks to buy according to analysts.
Polen US Small Company Growth Strategy stated the following about e.l.f. Beauty, Inc. (NYSE:ELF) in its Q3 2024 investor letter:
“The Portfolio’s top detractors were Progyny, elf Beauty, and Alarm.com. E.l.f. Beauty, Inc. (NYSE:ELF), a discount beauty company focused on cosmetics and skincare, is a new addition to the Portfolio this quarter. Please see Portfolio Activity below for further detail. We are intrigued by the company’s impressive track record for growth, margins, and returns on capital. While elf has reported significant results all year, shares came under pressure, in our view, as short-term investors primarily appeared to anticipate a slowdown in revenue growth, possibly due to investor concerns of market saturation, economic conditions, and valuation concerns, among other factors. While we are confident in how we underwrote our initial investment for returns above the portfolio average, the stock has come under even more pressure than we anticipated. We used this weakness to add to our position. We’re intrigued by the strength elf has experienced across its retailer and ecommerce channels, particularly in taking market share in a challenging consumer environment, given their relatively inexpensive prices vs. competitors.
elf Beauty, described above, is a discount beauty company focused on cosmetics and skincare. We find the company’s reputation for quality, innovation, and prices below mass cosmetics brands to be uniquely positioned. While this combination of innovation, quality, and value has led to compelling growth, we still believe it’s early days for the company. elf’s brand awareness is significantly less than that of more prominent players; it is still adding shelf space, expanding its product portfolio, and entering the skincare market. elf is also still a US-focused business, with some early signs of international success. The company’s financial profile is strong, and we expect EPS to grow by 25% over the long term.”