If you are wondering whether e.l.f. Beauty is offering value at its current share price or if the shine has already been priced in, this article breaks down what the numbers are really saying about the stock. The shares last closed at US$86.26, with returns of 5.1% over 7 days, 9.7% over 30 days, 10.9% year to date, a 32.8% decline over 1 year, and gains of 60.8% over 3 years and a very large increase over 5 years. Investors have been reacting to broader sentiment around beauty and consumer brands, as well as company specific headlines that keep e.l.f. Beauty on many watchlists. These moves set the scene for a closer look at whether recent price action aligns with the underlying fundamentals. On our valuation checks, e.l.f. Beauty currently scores 0 out of 6 on perceived undervaluation. You can see the breakdown of that score here. Next we will walk through the key valuation methods investors often rely on, then finish with a more holistic way to think about what the stock might be worth.
e.l.f. Beauty scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: e.l.f. Beauty Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model takes estimates of a company’s future cash flows and discounts them back to today’s dollars, aiming to give a single estimate of what the business might be worth now.
For e.l.f. Beauty, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is reported at about $154.7 million. Analysts provide cash flow estimates out to 2028, with Simply Wall St extrapolating further years to build a full ten year path. Those projections range from $47 million in 2026 to around $37.5 million in 2035, all in US$.
When those projected cash flows are discounted back and combined with a terminal value, the model arrives at an estimated intrinsic value of about $15.42 per share. Compared with the recent share price of $86.26, this particular DCF output suggests the stock is very expensive, with an implied overvaluation of 459.5%.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests e.l.f. Beauty may be overvalued by 459.5%. Discover 887 undervalued stocks or create your own screener to find better value opportunities.
ELF Discounted Cash Flow as at Jan 2026
Approach 2: e.l.f. Beauty Price vs Earnings
For a profitable company, the P/E ratio is a useful shorthand for how much you are paying for each dollar of earnings. It lets you quickly compare what the market is willing to pay for one business versus another that is also generating profits.
What counts as a normal or fair P/E depends a lot on expectations for future growth and the risks around those earnings. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually call for a lower multiple.
e.l.f. Beauty currently trades on a P/E of 62.87x. That sits above the Personal Products industry average of 22.70x and also above the peer group average of 13.36x. Simply Wall St’s Fair Ratio for e.l.f. Beauty is 40.13x, which reflects factors like earnings growth, industry, profit margin, market cap and risk profile.
The Fair Ratio is designed to be more tailored than a simple peer or industry comparison, because it adjusts for how e.l.f. Beauty’s specific growth, risks and profitability differ from other companies. Comparing the Fair Ratio of 40.13x with the actual P/E of 62.87x suggests the shares are pricing in more optimism than this framework implies.
Result: OVERVALUED
NYSE:ELF P/E Ratio as at Jan 2026
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Upgrade Your Decision Making: Choose your e.l.f. Beauty Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. These are simply your own story about e.l.f. Beauty, linked to a set of numbers such as future revenue, earnings, margins and a fair value that you can compare with the current price.
On Simply Wall St’s Community page, Narratives give you a simple workspace where you connect what you think is happening with the business to a forecast and an estimated fair value. You can then see at a glance whether your view suggests the stock looks cheap or expensive versus today’s price.
Because Narratives update as new information comes in, such as earnings, guidance changes or product news, you are not locked into a static view. You can quickly see how fresh data might shift your estimated fair value.
For e.l.f. Beauty, one investor might build a Narrative close to the trimmed fair value estimate of about US$115 per share after factoring in lower revenue growth, slightly softer profit margin assumptions and a future P/E of roughly 33.7x. Another might lean toward the analyst price target of US$165 if they think the company’s earnings, international expansion and acquisitions can support that higher number. Narratives let both of those views sit side by side so you can decide which story makes more sense to you.
Do you think there’s more to the story for e.l.f. Beauty? Head over to our Community to see what others are saying!
NYSE:ELF 1-Year Stock Price Chart
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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