ELF Beauty Expands Luxury Cosmetics Portfolio with $1B Acquisition of Rhode

e.l.f. Beauty has acquired Rhode for $1 billion, expanding its presence in the high-end cosmetics market. The acquisition suggests that Waldencast, which owns Milk Makeup, could be undervalued. Analysts forecast an average target price of $94.94 for e.l.f. Beauty, implying a 15.11% downside from the current price. The estimated GF Value for e.l.f. Beauty in one year is $202.66, suggesting a 81.21% upside.

In a strategic move to expand its portfolio, e.l.f. Beauty (NYSE: ELF) has acquired Rhode, a fast-growing lifestyle beauty brand founded by Hailey Bieber. The acquisition, valued at $1 billion, signifies e.l.f. Beauty's continued diversification into the high-end cosmetics market [1].

The deal, announced on May 28, 2025, includes a $800 million consideration payable at closing, with an additional potential earnout consideration of $200 million based on the future growth of the brand over a three-year period. This acquisition follows e.l.f. Beauty's recent acquisitions of e.l.f. SKIN and Naturium, which have significantly bolstered its skin care presence [1].

Rhode, known for its high-performance, skin-focused products, has seen remarkable growth, with a consumer base that more than doubled over the past year and net sales of $212 million in the 12 months ended March 31, 2025. The brand's innovative marketing strategy and strong community engagement have positioned it as a disruptor in content, commerce, and community [1].

The acquisition aligns with e.l.f. Beauty's mission to democratize access to the best of beauty for every eye, lip, and face. Hailey Bieber, founder of Rhode, will continue her role as Founder and assume additional responsibilities as Chief Creative Officer and Head of Innovation, overseeing creative and product innovation and marketing. Bieber's influence, coupled with e.l.f. Beauty's resources, is expected to accelerate Rhode's global expansion [1].

Analysts have forecasted an average target price of $94.94 for e.l.f. Beauty, implying a 15.11% downside from the current price. The estimated GF Value for e.l.f. Beauty in one year is $202.66, suggesting an 81.21% upside [2]. This acquisition could potentially undervalue Waldencast, which owns Milk Makeup, as it may not be fully leveraging its assets in the high-end market [2].

The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the second quarter of Fiscal 2026. e.l.f. Beauty's disciplined approach to strategic extensions and its commitment to inclusivity and accessibility make this acquisition a significant milestone in its journey to create a different kind of company [1].

References:
[1] https://investor.elfbeauty.com/stock-and-financial/press-releases/landing-news/2025/05-28-2025-210536607
[2] https://investor.elfbeauty.com/stock-and-financial/events-and-presentations