e.l.f. Beauty is experiencing slowed organic revenue growth and made a costly acquisition funded by debt. Despite a significant drop in stock price, it still trades at a premium earnings ratio. Revenue growth stagnation, declining gross margin, and increased debt are contributing to the company’s stock decline.

The company’s acquisition of Rhode is projected to boost overall growth by 18%-20%, but organic revenue growth is expected to slow to 3%-4%. Operating income decreased as marketing spending increased, highlighting further concerns. With a high P/E ratio, e.l.f. Beauty’s stock is not a strong buy candidate.

e.l.f. Beauty’s stock took a hit in 2025, down 39.4% with a 60% decrease from all-time highs. Slowing revenue growth, declining gross margins, and high debt levels are contributing factors. The company’s premium P/E ratio and lack of strong financial performance are key reasons for the stock decline.

Read more at Yahoo Finance: Why e.l.f. Beauty Stock Collapsed 40% In 2025