Ollie's Bargain Outlete.l.f. Beauty

Ollie's Bargain Outlet vs e.l.f. Beauty

On this page we compare Ollie's Bargain Outlet and e.l.f. Beauty, examining their business models, financial performance, and the market context surrounding each brand. The aim is to present neutral, ...

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Published: June 17, 2025

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Investment Analysis

Pros

  • Ollie's Bargain Outlet demonstrates strong revenue growth potential with expected average yearly revenue increase around 17.7% in 2026 and sustained growth beyond that.
  • The company shows solid profitability metrics including a return on equity (ROE) of 12.5%, well above its historical averages, indicating efficient capital use.
  • Ollie's benefits from diversified inventory across numerous categories and a wide geographic footprint with about 450 stores, increasing market reach.

Considerations

  • The stock trades at a relatively high price-to-earnings (P/E) ratio of over 38, raising concerns about overvaluation despite recent price gains.
  • CEO insider selling has notably reduced executive ownership by over 34%, which could indicate concerns at management level or affect investor sentiment.
  • The company’s valuation metrics score poorly on various checks, suggesting it may be overvalued by more than 60%, presenting downside risk.

Pros

  • e.l.f. Beauty operates in the growth-focused cosmetics sector with a reputation for accessible, cruelty-free, and vegan products catering to consumer trends.
  • The company's acquisition of celebrity brand Rhode is expected to boost revenues and brand appeal, potentially creating new growth avenues.
  • e.l.f. maintains a strong market position with a sizeable market capitalization and investor interest, reflecting confidence in its business model.

Considerations

  • e.l.f. Beauty’s price-to-earnings ratio exceeds 80, which is significantly high and may imply an expensive valuation relative to earnings.
  • The cosmetics industry faces intense competition and changing consumer preferences which could challenge e.l.f.’s growth trajectory and margins.
  • As a fashion and beauty company, e.l.f. is exposed to cyclicality and discretionary spending risks, making it vulnerable during economic downturns.

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