Must-See: Jim Cramer’s 10 Best Stock Picks for Investors Right Now

7. e.l.f. Beauty, Inc. (NYSE:ELF)

Number of Hedge Fund Holders: 40

Jim Cramer reported that TD Cowen significantly lowered its price target for e.l.f. Beauty, Inc. (NYSE:ELF), reducing it from $235 to $150 per share. This adjustment comes as e.l.f. Beauty, Inc. (NYSE:ELF)’s stock has dropped by 42% over the past three months. Cramer also noted that the cosmetics industry has become increasingly contentious.

“TD Cowen took an axe to its price target on Elf Beauty, going to $150 a share from $235. The stock has cratered 42% over the past three months. What a controversial area the cosmetics industry has become.”

e.l.f. Beauty, Inc. (NYSE:ELF) offers a strong investment opportunity due to its impressive financial performance, strategic growth efforts, and market expansion. In Q1 FY2025, e.l.f. Beauty, Inc. (NYSE:ELF) reported an earnings per share (EPS) of $0.87, exceeding expectations by $0.20, and achieved a 71.4% increase in revenue year-over-year, reaching $321.1 million. This growth was driven by both organic improvements and the successful acquisition of the skincare brand Naturium, helping e.l.f. surpass $1 billion in annual sales for the first time.

e.l.f. Beauty, Inc. (NYSE:ELF) is also increasing its market share in color cosmetics and has raised its fiscal 2025 outlook. e.l.f. Beauty, Inc. (NYSE:ELF)’s innovation, expanded retail partnerships, and effective digital marketing strategies aimed at younger consumers support this positive outlook. Analysts predict a 31.6% increase in EPS next year, highlighting e.l.f. Beauty, Inc. (NYSE:ELF)’s strong potential for long-term growth.

ClearBridge Multi Cap Growth Strategy stated the following regarding E.l.f. Beauty, Inc. (NYSE:ELF) in its first quarter 2024 investor letter:

“In consumer sectors, we added Tractor Supply Company and E.l.f. Beauty, Inc. (NYSE:ELF). ELF, in the consumer staples sector, is the third-largest mass cosmetics brand in the U.S. We believe the flywheel of ELF’s consumer value proposition, its innovation pipeline, and its unique ability to bring prestige-like products to mass consumers and high consumer engagement will enable the company to continue to outgrow the global market.

We see significant opportunity for ELF to transform itself from an emerging U.S. color cosmetics brand to a global beauty stalwart by doubling its share in the U.S. over the next few years and gaining share in international and skincare markets. ELF is profitable, balancing growth and earnings, and has an attractive balance sheet.”