Elf Beauty's Growth Prospects Of Gaining More Shelf Space At Walmart, Target Impress This Analyst

  • DA Davidson analyst Linda Bolton Weiser reiterated a Buy rating on the shares of E.L.F. Beauty, Inc. ELF and raised the price target from $91 to $110.
  • The analyst notes CEO and CFO seemed confident in ELF's growth prospects.
  • The analyst views getting more shelf space at Walmart Inc. WMT and U.S. drug stores as ELF's biggest opportunity.
  • The analyst said the company can continue to grow without margin dampening infrastructure investments, for the time being.
  • Marketing return on investments are still increasing, and even with spending now at 19% of sales, the analyst thinks higher future ratios are possible.
  • Management believes the ELF brand has a strong competitive moat, in that it holds the first or second market share position in 12 mass color cosmetics sub-categories.
  • ELF's large and growing loyalty program enabled it to successfully navigate the online privacy changes that disrupted so many other digital marketers.
  • The analyst thinks the management is open to acquiring more brands, but private market valuations still seem slightly elevated; rather than repurchasing stock, they would like to keep some cash as dry powder.
  • Price Action: ELF shares are trading higher by 0.41% at $92.96 on the last check Wednesday.
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