Can ELF sustain its earnings momentum into 2026?

**e.l.f. Beauty's (ELF) ability to sustain its earnings momentum into 2026 is uncertain** based on several factors: 1. **Recent Performance and Trends**: ELF's most recent report period for Q3 2025 showed a decline in net income and revenue growth rates. The company's net income decreased by 35.8% year-over-year, while total revenue grew by 31.14%. This indicates a challenging period for the company, with negative earnings momentum. |code|Ticker|Name|Date|Net Income YoY|Total Revenue YoY|Diluted EPS YoY|market_code| |---|---|---|---|---|---|---|---| |ELF|ELF.N|e.l.f. Beauty|2024 Q4|-10.581066108580574|71.4069930667122||169| |ELF|ELF.N|e.l.f. Beauty|2025 Q1|-10.234630122505992|49.98543951853341|-12.903225806451612|169| |ELF|ELF.N|e.l.f. Beauty|2025 Q2|-42.83309789306002|39.705438802451894|-43.103448275862064|169| |ELF|ELF.N|e.l.f. Beauty|2025 Q3|-35.8040761678072|31.141974511244065|-34.78260869565218|169| 2. **Analyst Sentiments and Price Target**: The consensus rating for ELF is "Neutral" with an average analyst price target of $112.48, indicating a cautious outlook from analysts. The stock has been downgraded to a "Strong Sell" by Zacks Investment Research, citing a growth cooldown and negative EPS outlook. 3. **Market Conditions and Challenges**: The cosmetics industry, including ELF, faces macroeconomic challenges such as softer consumer spending and increased competition. Despite these challenges, ELF has shown strong growth in net sales and market share in the past, which could be indicative of its resilience. 4. **Strategic Focus and Growth Prospects**: ELF has been expanding its global footprint and focusing on digital growth, international markets, and skincare products, which are positive signs for its long-term strategy. However, the effectiveness of these strategies in sustaining earnings momentum will be crucial. 5. **Financial Metrics and Projections**: ELF's ROCE has improved substantially over the past five years, reaching 14%, which is a positive indicator of the company's profitability and capital efficiency. However, the company's recent earnings report did not meet analysts' EBITDA estimates and full-year revenue guidance, which could impact investor confidence. In conclusion, while ELF has shown strong growth potential in the past, the current earnings momentum is negative, and sustaining this trend into 2026 will depend on the company's ability to address growth challenges, capitalize on strategic initiatives, and manage market conditions effectively. The uncertainty is high, and close monitoring of the company's performance and market dynamics will be necessary to assess its future prospects accurately.