As of June 13, 2025, e.l.f. Beauty Inc's estimated intrinsic value ranges from $28.11 to $145.83 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $145.83 | +13.5% |
| Discounted Cash Flow (5Y) | $103.89 | -19.2% |
| Dividend Discount Model (Multi-Stage) | $87.45 | -32.0% |
| Dividend Discount Model (Stable) | $53.28 | -58.5% |
| Earnings Power Value | $28.11 | -78.1% |
Is e.l.f. Beauty Inc (ELF) undervalued or overvalued?
With the current market price at $128.54, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate e.l.f. Beauty Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.6 | 0.7 |
| Cost of equity | 6.6% | 8.8% |
| Cost of debt | 4.6% | 7.0% |
| Tax rate | 12.5% | 17.9% |
| Debt/Equity ratio | 0.04 | 0.04 |
| After-tax WACC | 6.5% | 8.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $104 | $5,967M | 84.6% |
| 10-Year Growth | $146 | $8,333M | 73.1% |
| 5-Year EBITDA | $74 | $4,287M | 78.5% |
| 10-Year EBITDA | $106 | $6,089M | 63.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $126M |
| Discount Rate (WACC) | 8.7% - 6.5% |
| Enterprise Value | $1,455M - $1,931M |
| Net Debt | $108M |
| Equity Value | $1,347M - $1,823M |
| Outstanding Shares | 56M |
| Fair Value | $24 - $32 |
| Selected Fair Value | $28.11 |
| Metric | Value |
|---|---|
| Market Capitalization | $7250M |
| Enterprise Value | $7358M |
| Trailing P/E | 64.68 |
| Forward P/E | 49.25 |
| Trailing EV/EBITDA | 12.15 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.04 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $43.75 |
| Discounted Cash Flow (5Y) | 25% | $25.97 |
| Dividend Discount Model (Multi-Stage) | 20% | $17.49 |
| Dividend Discount Model (Stable) | 15% | $7.99 |
| Earnings Power Value | 10% | $2.81 |
| Weighted Average | 100% | $98.01 |
Based on our comprehensive valuation analysis, e.l.f. Beauty Inc's weighted average intrinsic value is $98.01, which is approximately 23.7% below the current market price of $128.54.
Key investment considerations:
Given these factors, we believe e.l.f. Beauty Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.