Exploring the Growth Potential of NYSE:ELF as It Nears a Breakout.

Last update: Oct 19, 2023

In this article we will dive into ELF BEAUTY INC (NYSE:ELF) as a possible candidate for growth investing. Investors should always do their own research, but we noticed ELF BEAUTY INC showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Exploring NYSE:ELF's Growth

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:ELF boasts a 9 out of 10:

The Earnings Per Share has grown by an impressive 143.30% over the past year.
The Earnings Per Share has been growing by 10.66% on average over the past years. This is quite good.
The Revenue has grown by 61.02% in the past year. This is a very strong growth!
The Revenue has been growing by 16.49% on average over the past years. This is quite good.
The Earnings Per Share is expected to grow by 33.48% on average over the next years. This is a very strong growth
ELF is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 27.24% yearly.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Analyzing Health Metrics

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:ELF, the assigned 8 reflects its health status:

An Altman-Z score of 19.92 indicates that ELF is not in any danger for bankruptcy at the moment.
ELF has a better Altman-Z score (19.92) than 100.00% of its industry peers.
ELF has a debt to FCF ratio of 0.70. This is a very positive value and a sign of high solvency as it would only need 0.70 years to pay back of all of its debts.
The Debt to FCF ratio of ELF (0.70) is better than 87.50% of its industry peers.
A Debt/Equity ratio of 0.13 indicates that ELF is not too dependend on debt financing.
ELF's Debt to Equity ratio of 0.13 is fine compared to the rest of the industry. ELF outperforms 62.50% of its industry peers.
ELF has a Current Ratio of 3.38. This indicates that ELF is financially healthy and has no problem in meeting its short term obligations.
ELF's Current ratio of 3.38 is fine compared to the rest of the industry. ELF outperforms 80.00% of its industry peers.
ELF has a Quick Ratio of 2.48. This indicates that ELF is financially healthy and has no problem in meeting its short term obligations.
ELF's Quick ratio of 2.48 is amongst the best of the industry. ELF outperforms 82.50% of its industry peers.

Exploring NYSE:ELF's Profitability

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:ELF was assigned a score of 8 for profitability:

With an excellent Return On Assets value of 15.21%, ELF belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
ELF has a Return On Equity of 21.21%. This is amongst the best in the industry. ELF outperforms 87.50% of its industry peers.
With an excellent Return On Invested Capital value of 17.78%, ELF belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
The 3 year average ROIC (7.21%) for ELF is below the current ROIC(17.78%), indicating increased profibility in the last year.
Looking at the Profit Margin, with a value of 14.87%, ELF belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
ELF has a better Operating Margin (15.96%) than 80.00% of its industry peers.
Looking at the Gross Margin, with a value of 68.39%, ELF is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
In the last couple of years the Gross Margin of ELF has grown nicely.

Looking at the Setup

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NYSE:ELF this score is currently 8:

Although the technical rating is only medium, ELF does present a nice setup opportunity. Prices have been consolidating lately. There is very little resistance above the current price. There is a support zone below the current price at 99.93, a Stop Loss order could be placed below this zone.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

Check the latest full fundamental report of ELF for a complete fundamental analysis.

Check the latest full technical report of ELF for a complete technical analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.