ELF
e.l.f. Beauty, Inc.
$74.22
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 84.4% above fair value
You pay
$74.22
Bear
$26.74
Fair
$40.25
Bull
$53.37
Bear
$26.74
-64.0%
6% stage 1 growth, 12% discount
Fair
$40.25
-45.8%
10% stage 1 growth, 12% discount
Bull
$53.37
-28.1%
13% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
34%
Implied Market Multiple
40.1x
Market is pricing in (growth)
20.3%
vs 9.8% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $75.00 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $40.25 per share.
Warnings
Stock-based employee pay equals 330% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $75.00 (from 27 analysts). Our estimate is 62% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions