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The analysts stated ELF “continues to glow,” and while it has outperformed, they still see further growth ahead.
ELF shares are up more than 92% in 2023 and well over 300% in the last 12 months. It has added a further 3% so far in Tuesday’s session, climbing to $108.09.
“ELF is now the number-3 mass cosmetics brand vs. number-5 a year ago, at 9.5% market share, according to Nielsen. Moving ahead, we expect ELF to benefit from expanded shelf space (now 12 feet at Target, 8 feet at Ulta, and 7 feet in Walmart), with further gains likely at Ulta, CVS, and Walgreens in fall 2023,” wrote the analysts.
“In addition, ELF has been successful in increasing productivity, growing its Ulta business by 70% in F23 without incremental shelf space.”
The analysts also said that they see the company’s marketing spend as a method to maintain and gain additional market share.
“For F24, we raise our net sales estimate to $734mm, +27% y/y vs. +25% prior, while we maintain our adj. EBITDA estimate at $160mm. ELF’s F24 guidance calls for net sales of $705-$720mm, or +22-24% y/y, gross margin of +100bps y/y, and adj. EBITDA of $144.5m-$147.5mm,” they added.
