Canaccord Genuity raised its price target for e.l.f. Beauty to $123 from $110, maintaining a buy rating as the company’s pricing strategy appears to be stabilizing growth and margins.
The firm’s revised valuation is based on 30 times its fiscal 2026 earnings-per-share estimate, up from a prior target of $97 to $110. e.l.f. Beauty’s stock last traded at $106.97, leaving shares roughly 15% below the new target. The company’s market capitalization stands at $6.31 billion, with a year-to-date gain of 41%.
Canaccord’s upgrade follows a strategic reversal of aggressive price reductions implemented in late May and June. At the end of May, 12% of products were priced lower, rising to 84% in June before declining to 16% holding reduced prices by July. The firm noted that while price cuts initially supported volume, they were not the primary driver of the company’s return to growth.
Analysts highlighted several growth catalysts, including the e.l.f. Hair line, product innovation, international expansion, and the performance of the rhode and Naturium brands. The company’s gross margin expanded to 71.6%, with an 83% figure cited in a recent quarterly report, partly attributed to tariff refunds. Trailing twelve-month revenue growth reached 31%, while fiscal 2026 revenue is projected to grow at a mid-single-digit rate.
e.l.f. Beauty’s pricing remains, on average, 68% lower than competitors, reinforcing its value proposition. Recent first-quarter results underscored the strategy’s effectiveness, with adjusted earnings per share of $1.75 beating a $0.73 consensus estimate, and revenue of $479.4 million exceeding the $430.82 million forecast.
Other analysts have also revised targets upward. TD Cowen raised its target to $110 from $85, while B.Riley and Goldman Sachs set new targets at $100 each.
