Shares of cosmetics company e.l.f. Beauty (NYSE:ELF) fell 3.6% in the afternoon session 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, which prompted a series of analyst downgrades and price target cuts.
The cosmetics company’s revenue of $343.9 million fell short of analyst expectations. The outlook was the main concern, as e.l.f. Beauty forecasted that its adjusted earnings per share would drop by about 17% for the full fiscal year 2026 compared to the previous year. The company’s gross margin also shrank, with management blaming the impact of higher tariff costs. Adding to the negative sentiment, Piper Sandler downgraded the stock’s rating from ‘Overweight’ to ‘Neutral’ and cut its price target significantly. Other firms, including TD Cowen and Jefferies, also lowered their price targets on the stock following the announcements.
The shares closed the day at $73.73, down 3.7% from previous close.
The stock market overreacts to news, and big price drops can present good opportunties to buy high-quality stocks. Is now the time to buy e.l.f. Beauty? Access our full analysis report here.
e.l.f. Beauty’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 32.6% on the news that the company reported mixed third-quarter 2025 results and issued a disappointing financial outlook. While its adjusted earnings per share of $0.68 beat expectations, revenue of $343.9 million fell short of analysts’ estimates. The main concern for investors, however, was the company’s forecast for the full year. Management’s guidance for revenue of $1.56 billion and adjusted EBITDA of $304 million, at their respective midpoints, came in significantly below Wall Street’s…
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