Shares of cosmetics company elf Beauty (NYSE:ELF) fell 3.6% in afternoon trading after the stock extended its negative momentum as the company reported mixed second-quarter results and issued a disappointing outlook for its full fiscal year, prompting a series of analyst downgrades and price target cuts.
The cosmetics company’s revenue of $343.9 million missed analysts’ expectations. The outlook was the main concern, as elf Beauty forecast its adjusted earnings per share would fall about 17% for all of fiscal 2026 compared to the previous year. The company’s gross margin also declined, with management attributing the impact to rising tariff costs. Adding to the negative sentiment, Piper Sandler downgraded the stock from ‘Overweight’ to ‘Neutral’ and significantly cut its price target. Other companies, including TD Cowen and Jefferies, also lowered their stock price targets following the announcements.
Shares closed the day at $73.73, down 3.7% from the previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is it time to buy elf Beauty? Access our full analysis report here.
elf Beauty stock is extremely volatile and has had 48 moves greater than 5% over the last year. In that context, today’s move indicates that the market considers this news significant but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago, when shares fell 32.6% on news that the company reported mixed Q3 2025 results and issued a disappointing financial outlook. While its adjusted earnings per share of $0.68 beat expectations, revenue of $343.9 million missed analyst estimates. However, investors’ main concern was the company’s full-year forecasts. Management’s guidance for revenue of $1.56 billion and adjusted EBITDA of $304 million, at their respective midpoints, fell significantly short of Wall Street projections. Adding to the concerns, the company’s operating margin fell to 2.2% from 9.3% in the same quarter last year. The combination of a lack of revenue and a weak forecast that implied a slowdown in growth and profitability sparked a negative reaction from investors.
elf Beauty is down 39.8% since the beginning of the year and, at $74.01 per share, is trading 49.5% below its 52-week high of $146.67 since September 2025. Investors who bought $1,000 worth of elf Beauty stock 5 years ago would now be looking at an investment worth $3,568.
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