Why e.l.f. Beauty (ELF) Shares Are Sliding Today
Shares of cosmetics company e.l.f. Beauty (NYSE:ELF) fell 27.4% in the pre-market session after the company reported disappointing fourth-quarter results. Its EPS and EBITDA missed. Due to weak demand trends observed earlier in the year, it lowered its full-year revenue, EPS, and EBITDA guidance, sending shares lower.
On the other hand, e.l.f. Beauty blew past analysts' revenue expectations this quarter, but markets are forward looking, and may likely raise concerns about the revised growth forecast. Overall, this was a weak quarter.
Following the results, Morgan Stanley downgraded the stock from Buy to Hold adding "We are downgrading ELF to Equal-weight post Q3 results last night, which were overshadowed by ELF lowering implied Q4 guidance significantly, confirming January US scanner data weakness.".
The shares closed the day at $71.13, down 19.7% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy e.l.f. Beauty? Access our full analysis report here, it's free.
e.l.f. Beauty's shares are extremely volatile and have had 45 moves greater than 5% over the last year. But moves this big are rare even for e.l.f. Beauty and indicate this news significantly impacted the market's perception of the business.
The previous big move we wrote about was 17 days ago when the stock dropped 5.9% on the news that research by Morgan Stanley analyst Dara Mohsenian revealed weak sales trends for the company (ELF). The research revealed that U.S. scanner sales growth "slowed to 5.5% year over year in the last two weeks, including Amazon first party, and were down 1.9% year over year in the last week." The analyst blamed the weakness partly "on the timing of the Martin Luther King Jr. Day and the LA wildfires."
e.l.f. Beauty is down 42.2% since the beginning of the year, and at $71.07 per share, it is trading 67.4% below its 52-week high of $218 from June 2024. Investors who bought $1,000 worth of e.l.f. Beauty's shares 5 years ago would now be looking at an investment worth $3,748.
Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
9 minutes ago
- Yahoo
Tesla stock rises as US moves to ease rules for self-driving cybercab
-- Tesla (NASDAQ:TSLA) stock rose 2.6%, hitting a session high on Friday after a report that the US government is taking steps to ease regulations that have hindered the deployment of self-driving vehicles without driver controls. According to Bloomberg, the Trump administration is streamlining the exemption process for automakers seeking to deploy self-driving cars designed without traditional steering wheels or brake pedals. This regulatory shift could significantly benefit Tesla's ambitions to launch its robotaxi service. The National Highway Traffic Safety Administration (NHTSA) announced it will simplify the exemption procedure, which previously resulted in processing times that could stretch for years. In a letter posted to its website on Friday, NHTSA Chief Counsel Peter Simshauser stated the agency "anticipates reaching decisions on most exemption requests within months rather than years." Current federal safety standards effectively require new vehicles to include human driving controls, forcing companies developing autonomous vehicles to seek exemptions - a process that has created substantial delays for manufacturers. While Tesla shares climbed on the news, ride-hailing companies Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) saw their shares edge lower, potentially reflecting investor concerns about future competition from autonomous taxi services. The regulatory changes align with Tesla CEO Elon Musk's previously announced plans to develop a fleet of self-driving "Cybercabs" that could compete directly with traditional ride-sharing services. Related articles Tesla stock rises as US moves to ease rules for self-driving cybercab Air India 787-8 accident - What we know so far Brookfield Infrastructure reportedly acquiring Hotwire for $7 billion
Yahoo
9 minutes ago
- Yahoo
Ford still struggling with rare earth supplies
-- Ford Motor Co . (NYSE:F) is still facing ongoing challenges with the supply of rare earth magnets from China, crucial for production of its cars. Ford CEO Jim Farley described the situation as "day to day" and "hand-to-mouth" in a Friday interview with Bloomberg TV. Last month, Ford idled its Chicago factory, which produces the Explorer sport utility vehicle, for a week because of the rare earth materials shortage. Farley expressed optimism about recent U.S.-China trade talks but noted that Ford has not yet seen improvements in magnet supply flow. The company has submitted applications to China's ministry of commerce (Mofcom), which are being approved one at a time. U.S. President Donald Trump stated that recent negotiations with China resulted in an agreement for Beijing to quickly approve export licenses for rare earths. Related articles Ford still struggling with rare earth supplies Wolfe downgrades GE Vernova on valuation concerns after rally Visa, Mastercard shares slide as WSJ says Walmart, Amazon exploring stablecoins
Yahoo
9 minutes ago
- Yahoo
2 Volatile Stocks with Exciting Potential and 1 to Be Wary Of
A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south. While some investors embrace risk, mistakes can be costly for those who aren't prepared. At StockStory, our job is to help you avoid costly mistakes and stay on the right side of the trade. That said, here are two volatile stocks with massive upside potential and one that could just as easily collapse. Rolling One-Year Beta: 1.18 With its iconic yellow machinery working on construction sites, Caterpillar (NYSE:CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services. Why Are We Hesitant About CAT? Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth Demand will likely fall over the next 12 months as Wall Street expects flat revenue Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 29% At $360 per share, Caterpillar trades at 18.6x forward P/E. Check out our free in-depth research report to learn more about why CAT doesn't pass our bar. Rolling One-Year Beta: 1.69 Founded in 2009 and a publicly traded company since 2017, Sea (NYSE:SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia. Why Are We Backing SE? Paying Users are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features Grip over its ecosystem is highlighted by its ability to grow engagement while increasing the average revenue per user by 11.7% annually Free cash flow margin expanded by 27.3 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends Sea's stock price of $154.03 implies a valuation ratio of 40.9x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it's free. Rolling One-Year Beta: 1.20 Founded in 1952, Distribution Solutions (NASDAQ:DSGR) provides supply chain solutions and distributes industrial, safety, and maintenance products to various industries. Why Will DSGR Beat the Market? Market share has increased this cycle as its 17.8% annual revenue growth over the last two years was exceptional Incremental sales significantly boosted profitability as its annual earnings per share growth of 24.9% over the last two years outstripped its revenue performance Free cash flow margin grew by 3.8 percentage points over the last five years, giving the company more chips to play with Distribution Solutions is trading at $27.77 per share, or 16x forward P/E. Is now the right time to buy? Find out in our full research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
