If you had invested $10,000 in Elf Beauty Inc. in January 2020, you would be sitting with $183,377 right now. That’s a whopping return of 1,683% in just 5 years!
Elf Beauty, also known as ELF on the NYSE, has absolutely crushed it from 2020 to 2024 with its amazing financials, epic brand expansion, and the beauty world going crazy over them.
On January 2, 2020, Elf, a hidden gem in the world of affordable cosmetics, was trading at just $9.24 per share. But by February 7, 2024, shares rose to $164.82.
So basically, if you invested in 500 shares at $9.24 in January 2020, you’d be looking at a whopping $82,410 right now. And if you invest $10,000 initially, your total return with dividends reinvested over time will be $183,377.
Driving elf Beauty’s Remarkable Trajectory
Elf Beauty began in 2004 as a budget-friendly cosmetics brand that operated primarily online. It became famous for its super affordable $1 makeup brushes. However, the company’s real success came after it went public in 2016.
From 2020 to 2022, Elf saw consistent double-digit revenue growth despite the pandemic as customers loved their affordable products.
In 2022, things really took off. The company sales increased by a massive 52% and their gross margin increased by 43%. This success was due to some of the fantastic new brands they have introduced and the wide distribution they have achieved.
Elf Beauty has made other acquisitions in recent years, including the acquisition of Naturium in 2023. The acquisition of Naturium has helped to expand Elf’s presence in the skincare market and elevate its average price point
The company is on a roll and expects sales to grow by 24% in 2024. They are really focused on coming up with new products, expanding internationally, and keeping costs under control.
Broader Beauty Sector Tailwinds
In addition to how well it’s performing financially, Elf stock is also getting a boost from investors who are really into the beauty space. Beauty stocks used to be a bit of a laggard for a while, but now they’re all the rage because of how fast things are reopening post-COVID.
People are going back to work, parties and traveling, causing demand for cosmetics to rise again after declining during the pandemic. Additionally, beauty companies have improved their online skills to adapt to what consumers want.
These headwinds are actually helping the entire region. ELF is also doing well due to things like its low-cost direct-to-consumer model, attracting Gen Z and Millennials, and being fast with social media. It is capable of shaking things up and capturing the attention of investors.
Key Takeaways – Time is Money with Quality Stocks
Elf Beauty’s impressive 1,683% return shows how important it is to identify good stocks early and let them grow over time. Although we cannot predict the future, the growth potential of ELF still looks quite promising.
If you choose your investments wisely and stick to them for some time, you can make more money than if you try to time the market. Just look at how Elf’s worth went from $250 million to over $2 billion in just 5 years.
If you put $10,000 into a promising growth stock early on, it could turn into a huge amount in the long run. If you really want to boost your investment portfolio, consider betting on innovative companies like Elf Beauty that use digital distribution strategies.
Financial Data’s of ELF Stock Over the Last 4 Year Period
Income Statement
IN USD THOUSANDS
| Financial Metric | 3/31/2023 | 3/31/2022 | 3/31/2021 | 3/31/2020 |
| Total Revenue | $578,844 | $392,155 | $318,110 | $282,851 |
| Cost of Revenue | $188,448 | $140,423 | $111,912 | $101,728 |
| Gross Profit | $390,396 | $251,732 | $206,198 | $181,123 |
| Research and Development | — | — | — | — |
| Sales, General and Admin. | $322,253 | $221,912 | $194,157 | $157,155 |
| Non-Recurring Items | — | $50 | $2,641 | -$5,982 |
| Other Operating Items | — | — | — | — |
| Operating Income | $68,143 | $29,770 | $9,400 | $29,950 |
| Add’l income/expense items | -$2,051 | -$1,898 | -$1,620 | $426 |
| Earnings Before Interest and Tax | $66,092 | $27,872 | $7,780 | $30,376 |
| Interest Expense | $2,018 | $2,441 | $4,090 | $6,307 |
| Earnings Before Tax | $64,074 | $25,431 | $3,690 | $24,069 |
| Income Tax | $2,544 | $3,661 | -$2,542 | $6,185 |
| Minority Interest | — | — | — | — |
| Equity Earnings/Loss Unconsolidated Subsidiary | — | — | — | — |
| Net Income-Cont. Operations | $61,530 | $21,770 | $6,232 | $17,884 |
| Net Income | $61,530 | $21,770 | $6,232 | $17,884 |
| Net Income Applicable to Common Shareholders | $61,530 | $21,770 | $6,232 | $17,884 |
Balance Sheet
IN USD THOUSANDS
| Financial Item | 3/31/2023 | 3/31/2022 | 3/31/2021 | 3/31/2020 |
| Current Assets | ||||
| Cash and Cash Equivalents | $120,778 | $43,353 | $57,768 | $46,167 |
| Short-Term Investments | — | — | — | — |
| Net Receivables | $67,928 | $45,567 | $40,185 | $29,721 |
| Inventory | $81,323 | $84,498 | $56,810 | $46,209 |
| Other Current Assets | $33,296 | $19,611 | $15,381 | $10,263 |
| Total Current Assets | $303,325 | $193,029 | $170,144 | $132,360 |
| Long-Term Assets | ||||
| Long-Term Investments | $2,875 | $2,875 | $2,875 | $2,875 |
| Fixed Assets | $7,874 | $10,577 | $13,770 | $17,171 |
| Goodwill | $171,620 | $171,620 | $171,620 | $171,321 |
| Intangible Assets | $78,041 | $86,163 | $94,286 | $102,410 |
| Other Assets | $31,866 | $30,368 | $34,698 | $26,967 |
| Deferred Asset Charges | — | — | — | — |
| Total Assets | $595,601 | $494,632 | $487,393 | $453,104 |
| Current Liabilities | ||||
| Accounts Payable | $102,401 | $59,231 | $57,050 | $38,555 |
| Short-Term Debt / Current Portion of Long-Term Debt | $5,575 | $5,786 | $16,281 | $12,568 |
| Other Current Liabilities | — | — | — | — |
| Total Current Liabilities | $107,976 | $65,017 | $73,331 | $51,123 |
| Long-Term Debt | $60,881 | $91,080 | $110,255 | $126,088 |
| Other Liabilities | $11,985 | $16,513 | $20,682 | $11,830 |
| Deferred Liability Charges | $3,742 | $9,593 | $13,479 | $21,892 |
| Misc. Stocks | — | — | — | — |
| Minority Interest | — | — | — | — |
| Total Liabilities | $184,584 | $182,203 | $217,747 | $210,933 |
| Stockholders Equity | ||||
| Common Stocks | $535 | $515 | $504 | $489 |
| Capital Surplus | -$421,999 | -$483,529 | -$505,299 | -$511,531 |
| Retained Earnings | — | — | — | — |
| Treasury Stock | $832,481 | $795,443 | $774,441 | $753,213 |
| Other Equity | — | — | — | — |
| Total Equity | $411,017 | $312,429 | $269,646 | $242,171 |
| Total Liabilities & Equity | $595,601 | $494,632 | $487,393 | $453,104 |
Cash Flow
IN USD THOUSANDS
| Cash Flow Item | 3/31/2023 | 3/31/2022 | 3/31/2021 | 3/31/2020 |
| Net Income | $61,530 | $21,770 | $6,232 | $17,884 |
| Cash Flows-Operating Activities | ||||
| Depreciation | $22,510 | $27,477 | $26,026 | $23,590 |
| Net Income Adjustments | $23,071 | $16,951 | $14,122 | $12,822 |
| Changes in Operating Activities | ||||
| Accounts Receivable | -$22,432 | -$5,597 | -$10,529 | $2,504 |
| Changes in Inventories | $3,174 | -$27,655 | -$10,937 | -$435 |
| Other Operating Activities | -$24,553 | -$10,555 | -$9,659 | -$6,500 |
| Liabilities | $38,583 | -$2,878 | $14,220 | -$5,552 |
| Net Cash Flow-Operating | $101,883 | $19,513 | $29,475 | $44,313 |
| Cash Flows-Investing Activities | ||||
| Capital Expenditures | -$1,723 | -$4,818 | -$6,474 | -$9,422 |
| Investments | — | — | — | — |
| Other Investing Activities | — | — | — | -$25,923 |
| Net Cash Flows-Investing | -$1,723 | -$4,818 | -$6,474 | -$35,345 |
| Cash Flows-Financing Activities | ||||
| Sale and Purchase of Stock | $8,053 | $1,677 | $1,503 | -$6,416 |
| Net Borrowings | -$30,000 | -$28,944 | -$11,756 | -$9,488 |
| Other Financing Activities | -$788 | -$779 | -$813 | -$771 |
| Net Cash Flows-Financing | -$22,735 | -$29,110 | -$11,400 | -$16,675 |
| Effect of Exchange Rate | — | — | — | — |
| Net Cash Flow | $77,425 | -$14,415 | $11,601 | -$7,707 |