Is NYSE:ELF on the Verge of a Major Breakout as a Strong Growth Stock?

Exploring Growth Potential: ELF BEAUTY INC (NYSE:ELF) and Its Base Formation. Growth investors seek promising revenue and EPS growth, and ELF BEAUTY INC has come under our scrutiny for potential growth investing. While it's crucial to do your own research, we've detected ELF BEAUTY INC on our screen for growth with base formation, suggesting it merits a closer look.

Unpacking NYSE:ELF's Growth Rating

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:ELF has earned a 9 for growth:

• ELF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 126.47%, which is quite impressive.
• ELF shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.62% yearly.
• ELF shows a strong growth in Revenue. In the last year, the Revenue has grown by 79.28%.
• Measured over the past years, ELF shows a quite strong growth in Revenue. The Revenue has been growing by 16.48% on average per year.
• ELF is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 37.88% yearly.
• ELF is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 38.80% yearly.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Health Assessment of NYSE:ELF

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:ELF was assigned a score of 5 for health:

• An Altman-Z score of 12.34 indicates that ELF is not in any danger for bankruptcy at the moment.
• ELF has a Altman-Z score of 12.34. This is amongst the best in the industry. ELF outperforms 91.89% of its industry peers.
• The Debt to FCF ratio of ELF (4.34) is better than 62.16% of its industry peers.
• ELF has a Debt/Equity ratio of 0.27. This is a healthy value indicating a solid balance between debt and equity.

Looking at the Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:ELF scores a 8 out of 10:

• The Return On Assets of ELF (11.67%) is better than 86.49% of its industry peers.
• ELF has a better Return On Equity (21.07%) than 86.49% of its industry peers.
• ELF's Return On Invested Capital of 15.85% is amongst the best of the industry. ELF outperforms 81.08% of its industry peers.
• The 3 year average ROIC (7.21%) for ELF is below the current ROIC(15.85%), indicating increased profibility in the last year.
• ELF's Profit Margin of 14.54% is amongst the best of the industry. ELF outperforms 97.30% of its industry peers.
• ELF has a better Operating Margin (15.80%) than 78.38% of its industry peers.
• ELF's Gross Margin of 70.33% is fine compared to the rest of the industry. ELF outperforms 70.27% of its industry peers.
• ELF's Gross Margin has improved in the last couple of years.

How do we evaluate the setup for NYSE:ELF?

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NYSE:ELF has a 7 as its setup rating, indicating its current consolidation status.

Although the technical rating is only medium, ELF does present a nice setup opportunity. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 178.66. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 166.24, a Stop Loss order could be placed below this zone.

More Strong Growth stocks can be found in our Strong Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of ELF

Our latest full technical report of ELF contains the most current technical analsysis.

Keep in mind

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.