The e.l.f. Beauty story: from one-dollar makeup to a 33x stock in five years

February 2019. Shares of cosmetics company e.l.f. Beauty fall within a month to about $6.7. That was 60% below the IPO price ($17) of just two and a half years earlier, and about 79% below the late-2016 peak. Stores were closing, sales were shrinking, and investors had given up on the company.

Five years later, in March 2024, the same stock reached about $222. That is roughly 33 times the low. $1,000 invested in early 2019 became more than $30,000 in five years.

Moves like this are usually expected from tech companies. e.l.f. sells lipstick, mascara and powder — ordinary makeup with an average price of about $9. So how did "cheap makeup" become one of Wall Street's best stocks?

And why did it then lose more than three quarters of its value again? The answer starts in 2004, with one-dollar products.

June 2004. Joseph (Joey) Shamah and Scott-Vincent Borba, with help from Shamah's father Alan, launch a new cosmetics brand. Its name — e.l.f. — stands for eyes, lips, face.

The idea was simple: sell good-quality makeup at a very low price. The company started with 13 products, most of them priced at just $1. Next to expensive brands, this let a lot of people "just try it."

In March 2010, e.l.f.'s $1 and Studio lines went into more than 700 Target stores, and the partnership expanded in 2011. The brand was no longer just an online curiosity but a product on the shelves of major retail chains.

In February 2014 private equity firm TPG Growth bought a majority stake. The CEO changed: Tarang Amin replaced Joey Shamah. For a private-equity-owned company, the next step is usually one thing — the stock market.

September 22, 2016. e.l.f. Beauty began trading on the New York Stock Exchange (NYSE) under the ticker ELF. Shares were sold at $17 — above the expected $14–16 range.

At first everything went well: within weeks the stock was above $30. Then the problems started. In 2018 e.l.f. sales fell 1% to $267.4 million — the company blamed weaker trends at select national retailers and a decline in discount channels.

The stock collapsed. From a peak of about $32.5 in November 2016 to February 2019 it fell about 79%.

In that same February 2019, Amin made a hard but clear decision: the company would close all 22 of its stores. They made up only 5% of sales. The freed-up money and attention would go to the brand, to big partners — Target and Walmart — and to digital channels. Amin said at the time that the company would refocus on its core advantage: delivering "prestige-quality cosmetics" at low prices.

That decision was the turning point of the story. But what truly made it explode was a new social network.

October 2019. e.l.f. launched the #EyesLipsFace challenge on TikTok. For it, the company commissioned an original song — "Eyes. Lips. Face." People started posting their own videos to it.

The result exceeded all expectations. According to the company's December 2019 press release, the challenge passed 4 billion views, and users created more than 2.8 million videos. The song reached No. 4 on Spotify's Global Viral chart. e.l.f. called it "the biggest branded TikTok campaign in history."

This was strategy, not luck. Amin later described e.l.f. as "an entertainment company that happens to sell beauty products." Instead of TV ads, the company invested where young people spend time — TikTok, gaming platforms and creators.

The second weapon was "dupes": cheap alternatives to expensive brands' products. According to CNN's examples, e.l.f.'s Poreless Putty Primer costs $11, while a comparable Tatcha product costs $55. Halo Glow costs $14; Charlotte Tilbury's comparable product, $50. On TikTok, young people compared these pairs and gave e.l.f. free advertising.

Low prices plus viral marketing soon showed up in the financial reports.

In the following years e.l.f.'s reports sounded almost the same: sales up, market share up. By May 2025 the company announced its 25th consecutive quarter of net sales growth and market share gains.

The numbers:

• 2018: $267.4M in sales
• Fiscal 2024 (ended March 2024): $1,023.9M
• Fiscal 2025: $1,313.5M (+28%), with U.S. market share up 190 basis points in a year

In six years, revenue grew almost fivefold. Meanwhile e.l.f., having closed its own stores, relied on big chains such as Target, Walmart and Ulta Beauty and on its own website — little capital, many partners.

The stock priced in this growth and then some. During 2023 it went from $55 to $144, passed $200 in February 2024 and peaked at about $222 in March. Compared with ~$6.7 in February 2019 — roughly 33x.

But such a price demands one condition: growth must not stop. And investors began to read every new report under a magnifying glass.

From summer 2024 the stock started to slide. Then on November 20 came a blow: well-known short seller Muddy Waters announced a short position in e.l.f. It alleged the company may have overstated revenue by about $135–190 million over the previous three quarters and questioned a change in how it took ownership of goods in China. e.l.f. rejected the allegations. Important: this is a short seller's claim, not a regulator's or court's finding.

In February 2025, citing softer-than-expected trends in January, the company cut its annual sales outlook from $1.315–1.335 billion to $1.30–1.31 billion. The stock fell sharply again within a month and reached about $49 in April 2025 — nearly 78% below its peak.

Then came a new risk — tariffs. According to CNN, about 75% of e.l.f. products were made in China at the time, and in August 2025 the company raised prices by $1.

Amin answered with an acquisition. In May 2025 e.l.f. announced it would buy Rhode, the brand founded by Hailey Bieber: $600 million in cash and $200 million in stock, plus up to $200 million more tied to three years of growth. According to CNN, Rhode launched in 2022 and had $212 million in sales in its prior fiscal year. Meanwhile, growth of the core e.l.f. brand slowed.

The stock swung sharply several more times in the following months. What the e.l.f. story proved is that cheap makeup can rise 33x. What it has not proved is how long that growth can last.