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

Sector: Consumer Defensive Industry: Household & Personal Products CIK: 0001600033
Market Cap 4.50 Bn
P/B 3.95
P/E 55.01
P/S 3.25
ROIC (Qtr) -6.46
Div Yield % 0.00
Rev 1y % (Qtr) 14.24
Total Debt (Qtr) 909.68 Mn
Debt/Equity (Qtr) 0.80

About

e.l.f. Beauty, Inc., commonly referred to as e.l.f. Beauty, operates in the beauty industry and is listed on the New York Stock Exchange (NYSE) under the ticker symbol ELF. The company's main business activities involve the development, manufacturing, and distribution of a wide range of beauty products, including cosmetics, skin care products, and hair care products. e.l.f. Beauty's operations are centered on four main brands: e.l.f. Cosmetics, e.l.f. SKIN, Naturium, and Keys Soulcare. These brands offer an array of products, such as eyeshadows,...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 194.40M provide 8.64x coverage of short-term debt 22.50M, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 141.98M exceeds capital expenditure of 30.05M by 4.72x, indicating strong organic growth funding capability.
  • Operating cash flow of 172.04M provides solid 0.66x coverage of current liabilities 261.87M, showing strong operational health.
  • Tangible assets of 891.58M provide robust 6.85x coverage of other current liabilities 130.07M, indicating strong asset backing.
  • Operating cash flow of 172.04M fully covers other non-current liabilities 30.72M by 5.60x, showing strong long-term stability.

Bear case

  • Operating cash flow of 172.04M barely covers its investment activities of (611.61M), with a coverage ratio of -0.28, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 194.40M provide limited coverage of acquisition spending of (580.60M), which is -0.33x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 172.04M shows concerning coverage of stock compensation expenses of 76.52M, with a 2.25 ratio indicating potential earnings quality issues.
  • Operating earnings of 135.61M show weak coverage of depreciation charges of 67.07M, with a 2.02 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 141.98M represents just 0.24x of debt issuance 590.20M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Household & Personal Products
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PG PROCTER & GAMBLE Co 344.56 Bn 20.55 4.06 35.95 Bn
2 UL Unilever Plc 162.92 Bn 24.93 2.32 -
3 CL Colgate Palmolive Co 64.98 Bn 22.35 3.23 8.42 Bn
4 EL Estee Lauder Companies Inc 38.59 Bn -41.50 2.67 9.42 Bn
5 KMB Kimberly Clark Corp 33.56 Bn 17.05 1.86 7.30 Bn
6 KVUE Kenvue Inc. 32.45 Bn 22.64 2.16 8.97 Bn
7 CHD Church & Dwight Co Inc /De/ 20.90 Bn 26.71 3.40 2.20 Bn
8 CLX Clorox Co /De/ 12.14 Bn 15.35 1.79 3.08 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.00 1.45
EV to Cash from Ops. EV/CFO 26.96 8.11
EV to Debt EV to Debt 5.10 4.77
EV to EBIT EV/EBIT 34.20 14.54
EV to EBITDA EV/EBITDA 22.86 7.35
EV to Free Cash Flow [EV/FCF] EV/FCF 32.66 2.98
EV to Market Cap EV to Market Cap 1.03 -1.59
EV to Revenue EV/Rev 3.35 2.00
Price to Book Value [P/B] P/B 3.95 -7.69
Price to Earnings [P/E] P/E 55.01 16.46
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 9.11
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.82
Dividend per Basic Share Div per Share (Qtr) 0.00 0.92
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 11.25
Interest Coverage Int. cover (Qtr) 7.46 2.65
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -212.98 -96.96
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 100.90 2.29
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -2.46
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -22.71 -142.06
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 16.01 -154.15
EBIT Growth (1y) % EBIT 1y % (Qtr) 2.59 -155.18
EBT Growth (1y) % EBT 1y % (Qtr) 0.57 -206.88
EPS Growth (1y) % EPS 1y % (Qtr) -24.87 -158.13
FCF Growth (1y) % FCF 1y % (Qtr) 524.65 -5.66
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 12.64 -1.42
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.60 0.82
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.19
Cash Ratio Cash Ratio (Qtr) 0.74 0.76
Current Ratio Curr Ratio (Qtr) 2.70 2.31
Debt to Equity Ratio Debt/Equity (Qtr) 0.80 -2.80
Interest Cover Ratio Int Coverage (Qtr) 7.46 2.65
Times Interest Earned Times Interest Earned (Qtr) 7.46 2.65
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 14.60 -32.28
EBIT Margin % EBIT Margin % (Qtr) 9.79 -37.76
EBT Margin % EBT Margin % (Qtr) 8.48 -40.89
Gross Margin % Gross Margin % (Qtr) 70.30 50.05
Net Profit Margin % Net Margin % (Qtr) 5.90 -42.94