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OEXN: ELF Plunges 25% as TikTok Uncertainty Dampens Beauty Buzz

ELF Beauty stock plunged 28.2% to $66.10 on Friday, marking its biggest single-day drop in years and extending its decline to 71% from its June 2023 peak of ~$220. The sharp sell-off followed the company’s mixed fiscal Q3 earnings report and weaker-than-expected guidance, which spooked investors. Despite strong past performance, ELF reported revenue expectations of $1.30B–$1.31B, falling short of analyst estimates of $1.34B, and projected EPS of $3.27–$3.32, missing forecasts of $3.54. The disappointing outlook was largely attributed to a “weak month” in January, driven by a notable decline in social media engagement, a key growth driver for the brand. CEO Tarang Amin pointed to two major factors behind this drop: the LA wildfires, which led influencers to reduce beauty-related content out of sensitivity, and uncertainty surrounding a potential TikTok ban, which shifted online conversations away from beauty trends. Despite the short-term turbulence, Goldman Sachs remains bullish on ELF’s long-term trajectory, citing its market leadership and strong presence at key retailers like Target, Walmart, and Ulta. The firm maintained its "Buy" rating but lowered its price target from $165 to $142, reflecting near-term challenges. Even with the steep stock decline, ELF remains one of the fastest-growing and most disruptive brands in the beauty industry, maintaining a competitive edge in the mass cosmetics market.

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Publication date:

2025-02-10 10:33:22 (GMT)

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