Here’s Why elf Beauty Inc. (ELF) Crashed on Friday

We recently compiled a list of the 10 Companies Echo Friday’s Market Pessimism. In this article, we are going to take a look at where elf Beauty Inc. (NYSE:ELF) stands against the other stocks.

Ten companies were hit hard on Friday as investors digested disappointing earnings performance and dismal outlook guidance for 2025.

The shares’ performance traded in line with Wall Street’s major indices, with the Dow Jones losing 0.99 percent, the S&P 500 falling 0.95 percent, and the tech-heavy Nasdaq diving 1.36 percent.

To come up with Friday’s worst performers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

A close up of the lip and eye products from the company on a model in a fashion and beauty shoot.

elf Beauty Inc. (NYSE:ELF)

Elf Beauty Inc. tumbled 19.62 percent on Friday to close at $71.13 apiece as investor sentiment was weighed down by a lowered earnings outlook for fiscal year 2025.

In its latest earnings release, ELF lowered its full year 2025 outlook to $1.3 billion and $1.31 billion from $1.31 billion to $1.33 billion previously.

“Given softer-than-expected trends in January, we are taking a prudent approach and lowering our outlook for the final quarter of our fiscal year. Our updated outlook for fiscal 2025 reflects an expected 27-28 percent year-over-year increase in net sales, as compared to an expected 28-30 percent increase previously,” said ELF Chief Finance Officer Mandy Fields.

In the third quarter of fiscal year 2025, ELF saw net income drop by 35.8 percent to $17.26 million from $26.89 million, while net income for the first nine months fell by 26 percent to $83.8 million from $113 million year-on-year.

Overall ELF ranks 3rd on our list of Friday’s worst performers. While we acknowledge the potential of ELF as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ELF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.