We recently published a list of the 10 Best Vegan Stocks to Buy According to Analysts. In this article, we are going to take a look at where e.l.f. Beauty, Inc. (NYSE:ELF) stands against the other best vegan stocks to buy according to analysts.
Overview of the Global Vegan Food Market
According to Grand View Research, the global vegan food market was valued at $16.55 billion in 2022. It is anticipated to grow at a compound annual growth rate of 10.7% between 2023 and 2030, reaching a projected revenue of around $37.45 billion by 2030. North America was the largest revenue-generating market in 2021. Country-wise, South Africa is anticipated to register the market’s highest compound annual growth rate between 2022 and 2030.
The primary reason behind this growth is the continually growing awareness regarding the benefits of a vegan diet. Concerns about animal cruelty and animal health are supporting the growth of this industry, causing people to shift from an animal-based to a plant-based and vegan diet. Grand View Research reported that Grubhub, a major online food delivery application, accounted for the upsurge of 17% in overall vegan food deliveries in 2021.
Concerns Surrounding the American Economy and the Food Industry
Despite the positive outlook of the vegan food market, the overall food industry in the US is a subject of concern due to the possible effects of Trump’s tariffs and slowing economic growth in the country. Consumers are reflecting these trends, as The Expectations Index dropped to a 72.9 reading, reflecting a decrease of 9.3 points. The measure has tumbled below the level consistent with recession for the first time since June 2024, according to CNBC.
In addition, The Conference Board’s Consumer Confidence Index dropped to 98.3 for February, reflecting a slip of nearly 7% and below the Dow Jones forecast of 102.3. We discussed what tariffs and potentially rising inflation could mean for the food industry in a recently published article on the 10 Cheap Food Stocks to Buy According to Hedge Funds. Here is an excerpt from the article:
Economists and experts opine that the situation is unpredictable and worrisome. Trump’s tariffs may ignite another bubbling of inflation in a scenario where the Federal Reserve is weighing the odds of whether to slash interest rates further or hold steady as experts and policymakers chalk out the effects of the President’s aggressive trade and fiscal policies, as reported by CNBC.
Consumers are reflecting the worries of economists and experts, as the 12-month inflation expectations rose to 6%, up from 5.2% in the last month and considerably higher than the Fed’s steady goal of 2%. CNBC reported that Guichard opined:
“This increase likely reflected a mix of factors, including sticky inflation but also the recent jump in prices of key household staples like eggs and the expected impact of tariffs. There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019. Most notably, comments on the current administration and its policies dominated the responses.”
Treasury Secretary Scott Bessent rang caution bells regarding “sticky” inflation and the potential for slow growth. He attributed the cause to former President Biden’s administration, saying that he fostered an economy too dependent on government spending. He said the government’s plan now is to develop a more diverse economy through deregulation, tax cuts, and tariffs. However, such a scenario is likely to have adverse effects on the food industry. Economists believe that such aggressive policies may drive the cost of food, apparel, toys, and appliances.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of vegan stocks. We then selected the top 10 with the highest analyst upside potential. We also added the number of hedge fund holders for these stocks as of fiscal Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of analysts’ average upside potential, as of March 4.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close up of the lip and eye products from the company on a model in a fashion and beauty shoot.
e.l.f. Beauty, Inc. (NYSE:ELF)
Analyst Upside: 55.15%
Number of Hedge Fund Holders: 35
e.l.f. Beauty, Inc. (NYSE:ELF) is a multi-brand beauty company that ranks on our list because of its clean, vegan, cruelty-free, and accessible cosmetics and skincare products. Its brand portfolio includes e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Well People, and Keys Soulcare. The company’s operations span eye, lip, face, makeup, beauty tools, accessories, and skincare products, all 100% vegan.
Fiscal Q3 2025 marked the company’s 24th consecutive quarter of net sales growth and market share gains, ranking e.l.f. Beauty, Inc. (NYSE:ELF) among a rarefied group of high-growth companies. It is one of the only six public consumer companies out of 546 that has grown for 24 straight quarters and averaged at least 20% sales growth per quarter. Furthermore, e.l.f. is the only brand among nearly 1,000 cosmetics brands tracked by Nielsen to gain share for 24 consecutive quarters.
In addition, fiscal Q3 2025 marked another quarter of consistent category-leading growth for the company. Its net sales grew by 31% and it delivered $69 million in adjusted EBITDA. e.l.f. Beauty, Inc. (NYSE:ELF) also grew its US market share by 220 basis points. The company’s fiscal H2 2025 outlook anticipates a 14% to 16% net sales growth on top of the 77% growth it delivered in the second half of last year. It ranks seventh on our list of the 10 best vegan stocks to buy according to analysts.
Polen US Small Company Growth Strategy stated the following about e.l.f. Beauty, Inc. (NYSE:ELF) in its Q3 2024 investor letter:
“The Portfolio’s top detractors were Progyny, elf Beauty, and Alarm.com. E.l.f. Beauty, Inc. (NYSE:ELF), a discount beauty company focused on cosmetics and skincare, is a new addition to the Portfolio this quarter. Please see Portfolio Activity below for further detail. We are intrigued by the company’s impressive track record for growth, margins, and returns on capital. While elf has reported significant results all year, shares came under pressure, in our view, as short-term investors primarily appeared to anticipate a slowdown in revenue growth, possibly due to investor concerns of market saturation, economic conditions, and valuation concerns, among other factors. While we are confident in how we underwrote our initial investment for returns above the portfolio average, the stock has come under even more pressure than we anticipated. We used this weakness to add to our position. We’re intrigued by the strength elf has experienced across its retailer and ecommerce channels, particularly in taking market share in a challenging consumer environment, given their relatively inexpensive prices vs. competitors.
elf Beauty, described above, is a discount beauty company focused on cosmetics and skincare. We find the company’s reputation for quality, innovation, and prices below mass cosmetics brands to be uniquely positioned. While this combination of innovation, quality, and value has led to compelling growth, we still believe it’s early days for the company. elf’s brand awareness is significantly less than that of more prominent players; it is still adding shelf space, expanding its product portfolio, and entering the skincare market. elf is also still a US-focused business, with some early signs of international success. The company’s financial profile is strong, and we expect EPS to grow by 25% over the long term.”
Overall, ELF ranks 7th on our list of the best vegan stocks to buy according to analysts. While we acknowledge the potential of ELF as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ELF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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