How e.l.f. Beauty Stock Slipped -40%
e.l.f. Beauty (ELF)’s stock tumbled 35%, not from earnings but a sharp P/E multiple drop, as Q2 revenue missed expectations and cautious FY26 forecasts spooked investors. Margin pressures and analyst cuts added fuel—let’s unpack the story behind the plunge.
| 11052025 | 11062025 | Change | |
|---|---|---|---|
| Stock Price ($) | 117.8 | 76.5 | -35.0% |
| Change Contribution By | LTM | LTM | |
| Total Revenues ($ Mil) | 1,342.8 | 1,342.8 | 0.0% |
| Net Income Margin (%) | 7.3% | 7.3% | 0.0% |
| P/E Multiple | 67.8 | 44.1 | -35.0% |
| Shares Outstanding (Mil) | 56.3 | 56.3 | 0.0% |
| Cumulative Contribution | -35.0% |
So what is happening here? The stock price fell 35%, driven entirely by a 35% decrease in the P/E multiple, while revenue and net margin held steady. Let’s dive into the events behind these shifts.
Before we get into details of events that led to stock decline, here is what market wisdom says: A single stock can be risky, but there is a huge value to a broader, diversified approach. Quiz time: Over the last 5 years, which index do you think the Trefis High Quality Portfolio outperformed — the S&P 500, the S&P 1500 Equal Weighted, or both? The answer might surprise you. See how our advisory framework helps stack the odds in your favor.
Here Is Why e.l.f. Beauty Stock Moved
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- Q2 Revenue Miss: e.l.f. Beauty reported Q2 fiscal 2026 revenue of $343.9 million, missing analyst estimates.
- Weak FY26 Guidance: The company’s full fiscal year 2026 revenue and adjusted EPS outlook fell below consensus.
- Margin Compression: Gross margin declined due to higher tariff costs, and operating margin also fell.
- Analyst Price Target Cut: Several analysts, including Jefferies and TD Cowen, lowered their price targets for ELF.
- Negative Investor React: Investors reacted strongly to the disappointing outlook, causing a significant stock plunge.
Our Current Assesment Of ELF Stock
Opinion: We currently find ELF stock fairly priced. Why so? Have a look at the full story. Read Buy or Sell ELF Stock to see what drives our current opinion.
Risk: A solid way to gauge risk is by checking how ELF has fared in past market crises. It fell about 75% during the 2018 correction, nearly 60% in the Covid crash, and around 37% during the recent inflation shock. Even with all the positive factors around ELF, these dips show the stock can take a serious hit when the market turns sour. Good fundamentals don’t always shield you from those big swings.
Think this decline in ELF stock is a buying opportunity? Maybe it is, but single-stock investments can be quite risky. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.