UK markets close in 17 minutes
  • FTSE 100

    6,860.68
    -144.71 (-2.07%)
     
  • FTSE 250

    16,705.17
    -615.80 (-3.56%)
     
  • AIM

    799.05
    -14.93 (-1.83%)
     
  • GBP/EUR

    1.1302
    +0.0124 (+1.11%)
     
  • GBP/USD

    1.1069
    +0.0184 (+1.69%)
     
  • BTC-GBP

    17,370.31
    -229.96 (-1.31%)
     
  • CMC Crypto 200

    439.80
    -6.18 (-1.39%)
     
  • S&P 500

    3,642.07
    -76.97 (-2.07%)
     
  • DOW

    29,233.74
    -450.00 (-1.52%)
     
  • CRUDE OIL

    82.05
    -0.10 (-0.12%)
     
  • GOLD FUTURES

    1,663.40
    -6.60 (-0.40%)
     
  • NIKKEI 225

    26,422.05
    +248.07 (+0.95%)
     
  • HANG SENG

    17,165.87
    -85.01 (-0.49%)
     
  • DAX

    11,957.42
    -225.86 (-1.85%)
     
  • CAC 40

    5,663.76
    -101.25 (-1.76%)
     

The 5.5% return this week takes e.l.f. Beauty's (NYSE:ELF) shareholders three-year gains to 115%

·2-min read

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But in contrast you can make much more than 100% if the company does well. For instance the e.l.f. Beauty, Inc. (NYSE:ELF) share price is 115% higher than it was three years ago. Most would be happy with that. Also pleasing for shareholders was the 17% gain in the last three months.

Since it's been a strong week for e.l.f. Beauty shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for e.l.f. Beauty

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

e.l.f. Beauty became profitable within the last three years. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
earnings-per-share-growth

We know that e.l.f. Beauty has improved its bottom line over the last three years, but what does the future have in store? It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

It's good to see that e.l.f. Beauty has rewarded shareholders with a total shareholder return of 15% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 4% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 2 warning signs for e.l.f. Beauty that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.