After one of the most incredible 18-month stock run-ups in beauty history, we're finally starting to see digital powerhouse e.l.f. Beauty ($ELF) achieve saturation as their revenue growth is finally stabilizing at a "mere ~75% YoY".
Sure, this growth is incredible, especially as e.l.f. continues to establish their owned channels and push their loyalty program beyond 4 million members. But their last earnings report spooked investors and temporarily erased all the gains made by the company since our last update. That was largely because The Street saw softening consumer budgets as a reason trends would slow down at a company like e.l.f.
But then, management pulled off something incredible.
In the last quarter, e.l.f has turned its focus to margins as opposed to revenue growth. While revenue growth continued to stay dialed-in at 76% YoY, adjusted EBITDA surged 122% as e.l.f. brought their SG&A expenses under control and established scale efficiencies that made every product that much more valuable.
E.l.f is in an incredible position where its marketing is so fine-tuned that they can afford to keep revenue growth practically on autopilot while they continue to crush expenses and drive even more shareholder value.
So, let's explore how e.l.f. is becoming a margins powerhouse and how they will continue to dominate and push past our next price target. 👇