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e.l.f. Beauty, Inc. Just Recorded A 47% EPS Beat: Here's What Analysts Are Forecasting Next

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e.l.f. Beauty, Inc. (NYSE:ELF) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 12% higher than the analysts had forecast, at US$123m, while EPS were US$0.27 beating analyst models by 47%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for e.l.f. Beauty

earnings-and-revenue-growth
earnings-and-revenue-growth

Following the latest results, e.l.f. Beauty's eleven analysts are now forecasting revenues of US$457.7m in 2023. This would be a notable 9.6% improvement in sales compared to the last 12 months. Per-share earnings are expected to expand 13% to US$0.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$441.5m and earnings per share (EPS) of US$0.56 in 2023. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 12% to US$38.67per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values e.l.f. Beauty at US$44.00 per share, while the most bearish prices it at US$35.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting e.l.f. Beauty is an easy business to forecast or the the analysts are all using similar assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that e.l.f. Beauty's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 9.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.4% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect e.l.f. Beauty to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards e.l.f. Beauty following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for e.l.f. Beauty going out to 2025, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with e.l.f. Beauty , and understanding this should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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