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e.l.f. Beauty Is Looking Good Again: Reversal in Play
Submitted by Thomas Hughes. First Published: 2/6/2026.
Article Highlights
- e.l.f. Beauty is on track to rebound in 2026 as it regains traction, gains market share, and outperforms estimates.
- Analysts are lifting price targets, pointing to a 40% gain at the consensus.
- Institutional activity aligns with a market bottom, having shifted to accumulation in early 2026.
e.l.f. Beauty (NYSE: ELF) struggled in 2025 with consumer shifts, slowing growth, and the less-than-spectacular rollout of the rhode makeup and skincare brand. But that was then — this is now.
In fiscal Q3, results showed consumers remain resilient and the bottom has not fallen out of the cosmetics market. rhode has started to gain traction, and the key takeaway is that e.l.f. comfortably beat the low expectations analysts set — with guidance that is equally upbeat. (Note: e.l.f. Beauty's fiscal year runs ahead of the calendar year.)
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Claim your free copy of How To Master The Retirement Trade nowThe company is forecasting more than 20% growth in 2026; its guidance outpaced consensus by a significant margin and may be conservative.
e.l.f. Beauty Dazzles in Q3, Raises Guidance, Analysts Cheer
e.l.f. Beauty delivered a strong fiscal Q3 2026, with revenue rising 37.8% to $489.5 million. The top line beat consensus by roughly 600 basis points, driven by strength in retail and ecommerce channels both domestically and internationally. A solid UK rhode rollout and better-than-expected margins were notable contributors.
Gross and operating margins contracted, but tariff headwinds were smaller than anticipated. SG&A increased, driven by marketing, merchandising, and other expansionary investments that supported growth.
That elevated spending helped drive the company's growth and should moderate in future quarters. Cash flow remains healthy, and adjusted EPS of $1.24 was up 67% year-over-year and beat consensus by an even wider margin than revenue.
On the balance sheet, year-to-date metrics include a rise in debt, though leverage remains relatively low at roughly 1x equity. Cash balances are healthy and equity is increasing. The primary investor risk is dilution, but the threat appears minimal: share count has risen by less than 1.25% YTD, and further expansion is not expected to accelerate.
Analysts Raise e.l.f. Price Targets, Confirm Market Bottom
Analysts acknowledged concerns about e.l.f.'s valuation and growth trajectory following the results but largely maintained their ratings, with some lifting price targets. That activity supports the Moderate Buy rating and reinforces the price bottom that began forming in 2025.
While sentiment stayed at Moderate Buy over the last 12 months, price-target cuts weighed on the stock in 2025. That headwind has eased (read more), and analyst sentiment is likely to firm further this year as results continue to outpace expectations.
Institutional trends also point to a shift in market dynamics. Institutional investors, who own more than 90% of the stock, sold on balance in the back half of 2025 but returned to net accumulation in early 2026. This activity aligns with the late-2025 price bottom and the 2026 rebound, providing a support base and a tailwind for price action. The risk is that institutions resume distribution, but that outcome looks unlikely given the company's performance and growth outlook.
e.l.f. Beauty Sets Up to Move Higher
The price action in ELF is not fully recovered yet, but it is showing signs of a hard bottom and potential to move higher within its trading range. Technical indicators point to a momentum shift and leave the market with ample room to run.
Resistance targets include a cluster of moving averages near $100 and the consensus target around $120. A move to consensus would be roughly 40% higher from the pre-release close, while a move into the high end of the range (likely by year-end) would add additional double-digit gains.
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