Beauty vs. the AI beast: The company that beat Nvidia over a five-year period

Put it a different way, $1,000 invested in E.L.F. five years ago would be worth over $26,000 now, versus about $20,000 for Nvidia, using slightly different data from FactSet.

The two companies couldn’t be more opposite — an AI chip maker and a cruelty-free, vegan cosmetics maker — but they do have so-called earnings triple plays in common, says Bespoke.

That occurs when a company reports results, beating analysts’ estimates for earnings per share and sales, and raises forward guidance. Nvidia has reported five triple plays in a row, notes Bespoke, while E.L.F. had seven triple plays in a row dating back to August 2022.

While Nvidia’s success secrets are pretty well known, E.L.F.’s has a cult following among its primarily Gen Z and millennial consumers, with low-priced beauty products that compete with more expensive brands. Target
TGT,
+1.23%
and Walmart
WMT,
-0.02%
are among the retailers that carry its products.

The maker of Wow Brow Gel and Poreless Putty Primer further raised its annual forecasts in February after earnings that came in well above analysts’ estimates and an 85% surge in sales.

The beauty group has more than doubled its market share in the past two years and plans further hires to support international growth.

E.L.F. also crushes it when it comes to the ad space. Its #eyeslipsface TikTok Hashtag Challenge in 2019 was the first branded TikTok campaign to use original music, and became one of the social-media app’s most viral ads ever.

Shares of E.L.F., which says it “stands with every eye, lip, face, paw and fin,” surged over 40% on their first day of trading in September 2016 on the New York Stock Exchange, finishing at $26.50 per share, and currently trade just under $200 per share.

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