e.l.f. Beauty (NYSE: ELF) – A Bargain with Big Growth Potential
e.l.f. Beauty, the cosmetics brand known for its affordability and innovation, could be one to watch after its sharp pullback in 2024. The stock dropped 13% last year, its first losing year since 2018, and is currently trading at nearly half of its 2024 highs when it topped $218 in June. This pullback has created an opportunity for investors looking for growth at a more reasonable valuation.
Morgan Stanley’s analyst Dara Mohsenian recently upgraded e.l.f. to overweight from equal weight, citing its “outsized long-term growth potential” and a now-compelling valuation. Mohsenian also raised the price target to $153, indicating almost 23% upside from last week’s close. While these insights originate from Morgan Stanley, the broader market trends also suggest a favorable setup for the stock.
The valuation reset, paired with e.l.f.’s consistent innovation and brand strength, makes it an intriguing play. Concerns about tariffs and difficult sales comparisons that weighed on the stock last year have largely diminished. Additionally, the broader consumer staples sector lacks the same growth potential, further highlighting e.l.f. as a standout in its category.
With the stock briefly climbing 2.5% following the upgrade and the potential for long-term growth intact, e.l.f. Beauty looks like a smart addition to your watchlist. This is a chance to grab a high-quality growth stock at a discount—an opportunity that doesn’t come around often.
