ELF has 27 consecutive quarters of growth and their stock is still down 70% from ATHs.

+ My Agentic Exec team.

On Inspiration from Jason Lemkin’s VP of Marketing posts from the past month in Claude (Desktop) I’ve built a CRO, CFO, CCO and Product Manager agent.

What do they all do?

I’ve hooked them all up to our financial and operational data so:

Is it the same quality as one of these roles would be? Obviously not. They’re all essentially Analysts + Strategists at the highest level for given roles.

But it’s good enough that I can get the same level of thought partnership LONGGG before I can afford to hire any of them.

For everyone who’s familiar with EOS, it’s very funny to have my L10 meetings in a Claude chat vs. a 1.5 hr Zoom. But it allows me to probe so much further so much quicker.

Note: As always, none of what follows is legal, tax, investing, financial, or any other sort of advice. And I was never here 😉.

The market has ELF (the fast follow viral cosmetics brand) dead wrong.

Another victim to Tarriff, ELF had to pull their 2026 guidance because they can’t properly predict COGS this year (Beauty tariffs could hit 100%). The market is punishing them for it.

Link to e.l.f. Beauty's FY2025 earnings: SEC EDGAR 10-K Filing

FY2025 for ELF. FY2024 for peers. L'Oreal, COTY, and Kenvue figures are GAAP approximations from public filings. Peer S&M estimates based on reported SG&A disclosures.

They didn’t put up their best year, but these numbers are strong for a biz that should be hurting with Tariffs and consumer sentiment. But they’re still growing and plugging away.

The lipstick effect is real and has been helping ELF continue to scale.

Founded:

Aha Moment:

Growth:

Model:

Where We Are Now:

Here are the 3 ways we're turning e.l.f. Beauty into the $10B US L’Oreal.

ELF has run 3 consecutive Super Bowl ads. They are good. And they worked. US brand awareness went from 10-40%.

Now it’s time to take it to the next level.

$401M in S&M (30% of revenue) is too high for a brand of this scale. What drives their actual sales. 

Viral Stunt Collabs.

Each generated more Earned Media/$ (aka efficiency) than any Super Bowl slot. The Liquid Death collab alone hit 2B impressions on a product that cost almost nothing to make. That's the model.

Redirect the budget. Keep S&M $$$ flat and bet the farm on what’s working. 

Than take the craziest most viral idea and push it during the super bowl

If ELF can get S&M as % of Rev down to 27% they unlock +$44M in net income on the FY2026 revenue base. At 25x earnings, that's +$1.1B in EV sitting on the table.

Takeaway: Don’t overpay for eyeballs when you have creativity.

ELF is tapping out their US growth. Only 18% of their Rev comes from abroad. It’s time to take this show stopping playbook on the road.

For Context: NYX (L'Oreal's most direct comp does 70% of Rev internationally). ELF does 18%. That gap is not a market size problem. It's a distribution decision.

The UK is ELF's second biggest market and still under penetrated.  UAE, Brazil, and SE Asia are 3 of the fastest-growing mass beauty markets in the world. 

ELF is behind.

They can take the same Retail + TTS Viral driven content to all their markets

For $30-40M in capex they can add $164m in incremental revenue. At 35% contribution margin after international logistics costs, that's +$44m in net income. 

The same products, playbooks and brand. This 1 move adds $500m in EV for the biz. 

Over the next 10 years the majority of their Rev should come from international (similar to L’Oreal).

Takeaway: When you have the brand + Playbook. Take it abroad.

ELF's playbook works. 

They did this with foundation, concealer, blush, primer, and setting spray. They’re hitting the saturation point in Cosmetics.

L’Oreal is the perfect end state for what ELF can be. It has a massive:

ELF already has ELF Beauty and ELF Skincare. But L’Oreal still makes $17B/yr from Haircare and Fragrance. 

ELF dropped a fragrance collab with H&M. Here’s where the model compounds. 

Within a year they’ll have 12 more scents on the market and a legit fragrance biz with multiple retail partners.

Could you imagine a Chipotle Burrito Fragrance to match their Chipotle lip gloss. Ulta would have to carry both.

Then launch the same playbook in Haircare.

Taking their “Fast Fashion approach” to cosmetics and rolling it out to all major areas in the beauty aisle.

It’s the perfect combination of Media, Brand, Distribution and buzz. 

ELF is the Masstige brand at affordable prices.

Then you can model the same playbook at the Prestige level under Rhode. Swap in Chipotle with a special Sabrina Carpenter’s perfume. Sephora would stock every store with that line up. 

At the end of the day Ulta + Sephora are the real customers here. The more products across all categories those retailers sell the more profits w/ faster growth ELF will have. Then the more foot traffic ELF can drive through major cultural moments the faster they’ll grow.

This is how they can justify spending $1B and paying 5x Rev on an acquisition like Rhode.

In 2 years the combined opportunity is +$100m in incremental Rev, which could add another +$800m - $1B to their market cap. This alone would recoup their Rhode Acquisition.

Takeaway: Once you’ve mastered a playbook. Expand into other areas you can win.

ELF has 18 months to prove that they are good acquirers. Rhode is the grand slam swing. If it works out they’re geniuses.

If it fails this will be a string of acquisitions that didn’t work out for the brand.

Rhode will be their last chance to prove that they can integrate these acquisitions successfully.

If they can’t this will be a traumatizing write off at <$400m (= What the actually brand is worth -Goodwill).

The biggest existential question ELF should be asking is when is it time to sell off the acquisitions. Give up on the Prestige play and focus 100% on what they do best.

Viral Knock off dupes.

The biggest insight they had was bringing Fast Fashion mechanics to Beauty. They absolutely nailed it for Cosmetics. They’re just starting with Skincare.

But is the Prestige play a side quest?

They’re M&A hasn’t performed to date. All their big wins are still from creative hustle selling the trending Luxury items at 20% of the price.

Expanding internationally + into new categories (Fragrance and Beauty) gives them so much market share to chase.

Is Prestige going to be the massive Profit machine they believe. Or a VERY expensive distraction?