e.l.f. Beauty, Inc. (ELF) Could be Worth $23-$25/Share in Takeout - Jefferies

Jefferies analyst Stephanie Wissink maintains Hold on e.l.f. Beauty (NYSE: ELF) price target of $13.00.

The analyst comments (emphasis StreetInsider): "The beauty sector has been flush with M&A activity in recent years, a function of indie brands taking share from legacy large scaled brands; dramatic changes in brand building mechanisms and a shift toward digital; the role of influencers in advancing awareness and reach; and ease of sourcing and distribution (specialty and online). Among the top 10 personal care companies globally, all have had active M&A strategies. Average multiples near 4-5x sales, ~20x TTM EBITDA. Peak multiples, where brands are early stage with global distribution potential, have extended to 8x sales and 40x EBITDA. Applying an average multiple to ELF would derive a take out value near $23; a 15-20% discount for lack of growth would imply $18; if we assume the company cost cuts to the level suggested by the activist ($25M to EBITDA), implied value at an average multiple could potentially near $25/share."

For an analyst ratings summary and ratings history on e.l.f. Beauty click here. For more ratings news on e.l.f. Beauty click here.

Shares of e.l.f. Beauty closed at $13.40 yesterday.

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