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E.l.f. Is A Real Beauty; Jefferies Initiates With Buy

E.l.f. Is A Real Beauty; Jefferies Initiates With Buy

Investors can thank the "selfie generation" for helping boost beauty-related stocks higher, according to Jim Cramer. Teens and millennials are constantly taking selfies for social media platforms — with the apparent implication that everyone needs to look their best at all times.

E.l.f. Beauty Inc (NYSE: ELF) is the latest beauty and cosmetics company that's attracting the attention of the Street. Jefferies' Stephanie Wissink initiated coverage of the cosmetic company with a Buy and $30 price target, mostly due to the company's growth profile.

E.l.f. is among a small handful of small and mid-cap companies that boasts a "superior" 22 percent EBITDA margin profile for its size, along with a path toward a 20 percent-plus sales growth driver, Wissink said. The company's core makeup category is growing faster than the overall sector at 25 percent versus just 6 percent.


Part of the analyst's bullish thesis is also based on the company's ability to win in the social media space. E.l.f. spends less than 5 percent of sales on marketing and is able to rely on the "social nature" of its brand that's backed by the "beauty enthusiast and influence community."

The bottom line from Wissink: E.l.f's financial profile and outlook is "meaningfully better than most in mass color cosmetics."

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Latest Ratings for ELF

Jan 2021Piper SandlerDowngradesOverweightNeutral
Dec 2020Morgan StanleyMaintainsOverweight
Nov 2020Piper SandlerMaintainsOverweight

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