Is it Time to Buy the Dip on e.l.f. Beauty Stock?

By Reuben Gregg Brewer – Mar 13, 2026 at 7:15PM ESTKey Pointse.l.f. Beauty makes low-cost cosmetics.The company's revenues continue to expand, but its earnings haven't been as reliable. Cosmetics maker e.l.f. Beauty (ELF +1.12%) was a market darling a few years ago, as rising revenues and earnings drew investors into the fast-growing brand. The price-to-earnings ratio rose to more than 90x in 2024. Since that peak, the stock has lost roughly two-thirds of its value. Is it time to buy the dip? The good news from e.l.f. Beauty Essentially, e.l.f. Beauty imports low-priced cosmetics. That has been a winning formula for the company, as it has posted a long string of quarterly revenue increases. Helping the top line along has been expansion into new markets and new product categories. From a revenue perspective, e.l.f. Beauty has been a great success and continues to be so. Image source: Getty Images. At this point, the stock is trading at a price-to-sales ratio of 3.1x, well below its five-year average of 5.3x. It has a price-to-earnings ratio of 45x, well below its five-year average of 73x. And the price-to-book ratio is 4x, again well below the five-year average P/B ratio of 7x. Compared to its own history, e.l.f. Beauty looks cheap. The bad news from e.l.f. Beauty The problem with the valuation picture is that on an absolute level, e.l.f. Beauty is still fairly expensive. For comparison, the S&P 500 index (^GSPC 0.61%) currently has a P/E ratio of 28x. Notably, the S&P 500 is still trading near all-time highs. So while e.l.f. Beauty is cheaper than it was, it still isn't cheap on an absolute basis. Investors with a value focus won't be interested even after the stock's deep drawdown. ExpandNYSE: ELFe.l.f. BeautyToday's Change(1.12%) $0.81Current Price$73.39Key Data PointsMarket Cap$4.3BDay's Range$71.90 - $75.9152wk Range$49.40 - $150.99Volume94KAvg Vol2.1MGross Margin65.91% The big issue is that the company's revenues have continued to grow, but its earnings have become less reliable. A notable headwind has come from rising tariffs, given the company's import-driven model. The company's profit margin has declined by 33% over the past three years. That is a worrying trend and suggests the stock may not have as strong a growth trajectory as investors once thought. Is it time to buy e.l.f. Beauty? At the end of the day, e.l.f. Beauty is still growing its business at an impressive rate. More aggressive growth investors may be interested in the stock given the recent price pullback, but the shares remain relatively expensive. Most investors are probably better off on the sidelines, at least until the company's earnings start trending consistently higher, along with its steadily rising sales.Read NextFeb 26, 2026 •By Geoffrey SeilerIs e.l.f.

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Beauty Stock Jumped 12% in JanuaryAbout the AuthorReuben Gregg Brewer is a contributing Motley Fool stock market analyst covering energy, utilities, REITs, and consumer staples. He is the former director of research at Value Line Publishing, where he rose from mutual fund analyst to equity analyst before leading all research operations. Reuben holds a bachelor’s degree in psychology from SUNY Purchase, a master’s in social work from Columbia University, and an MBA from Regis University. He has been featured as a financial expert on CNBC and in the Financial Times, Barron’s, and InvestmentNews.TMFReubenGBrewerStocks Mentionede.l.f. BeautyNYSE: ELF$73.39(+1.12%)+$0.81S&P 500 IndexSNPINDEX: ^GSPC$6,632.19(-0.61%)-$40.43*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.