Top cosmetics stocks this quarter include elf Beauty Inc., Yatsen Holding Ltd. and Coty Inc., which have all climbed at least 77% in the past year to outpace their industry-wide peers.
Cosmetic companies can be found in both consumer goods and Consumer sector sectors. Over the past year, the S&P 500 Consumer Staples Index is down about 1%, while the S&P 500 Consumer Discretionary Index is up 5%. The Russell 1000 Index it grew by roughly 4% in the same period.
Below, we look at the best cosmetics stocks based on best value, fastest growth and most momentum. All data below is as of May 22.
Best value cosmetics deals
These are cosmetics stocks with the lowest 12-month lag price to earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio indicates that you are paying less for each dollar of profit generated.
|Best value cosmetics deals|
|Price ($)||Market capitalization (market capitalization) ($B)||12-month trailing P/E ratio|
|Sally Beauty Holdings Inc. (SBH)||11.06||1.2||7.6|
|Olaplex Holdings Inc. (OLPX)||3.40||2.2||11.3|
|Ulta Beauty Inc. (ULTA)||480.68||24.1||20.0|
- Sally Beauty Holdings Inc.: Sally Beauty is a holding company that, through subsidiaries, sells beauty products to consumers in Sally Beauty stores and directly to professionals. Shares fell 13% on May 4 after the company said it expected store closures over the course of the year to cause sales to fall from 2022 levels.
- Olaplex Holdings Inc.: Olaplex Holdings is a cosmetic company providing premium hair care products. The company sells its products to salons, individual consumers and retailers. Olaplex said in its February and May earnings reports that it expects revenue and net profit to decline by double-digit percentages in 2023. The stock has lost more than half its value since early February.
- Ulta Beauty Inc.: Ulta Beauty operates a chain of beauty stores across the United States. The company sells cosmetics, skin and hair care products, fragrances and salon services. Ulta’s net sales rose nearly a fifth in the final quarter of 2022 on the strength of new brands and price increases.
Fastest growing cosmetics stocks
These are the best beauty stocks as rated by a grow a model that ranks companies based on 50/50 weights of their most recent quarterly year-over-year (YOY) percentage revenues growth and last quarterly year-on-year earnings per share (EPS) grow.
Both sales and profit are decisive factors for the company’s success. Therefore, evaluating companies by only one growth metric makes the evaluation vulnerable to accounting anomalies quarter boy (such as changes in tax laws or restructuring costs) that may cause one or the other value to be unrepresentative of the business in general. Companies with quarterly earnings per share or revenue growth of more than 1,000% were excluded as outliers.
|Fastest growing cosmetics stocks|
|Price ($)||Market Cap ($B)||EPS growth (%)||Income growth (%)|
|elf beauty inc. (ELF)||85.95||4.6||183.3||49.3|
|Coty Inc. (WHAT ABOUT YOU)||11.12||9.5||100.0||8.7|
|Ulta Beauty Inc. (ULTA)||480.68||24.1||23.5||18.2|
- elf Beauty Inc.: Elf Beauty mainly provides cheap cosmetic products for eyes, lips and face. EPS nearly tripled for the third quarter of fiscal 2023, which ended Dec. 31, 2022, in both the retail and e-commerce channels.
- Coty Inc.: Coty is a cosmetics company offering fragrances, color cosmetics, and skin and body care products. It sells its products in more than 130 countries and territories. Coty’s sales rose 9% in the most recent quarter thanks to growth in its Prestige business line – primarily high-end perfumes. EPS doubled thanks to operational improvements, among other things.
- Ulta Beauty Inc.: See company description above.
Cosmetics stocks with the greatest dynamics
These are the beauty stocks that had the highest total return over the last 12 months from the companies we tracked.
|Cosmetics stocks with the greatest dynamics|
|Price ($)||Market Cap ($B)||Total return in 12 months|
|elf beauty inc. (ELF)||85.95||4.6||304.5|
|Yatsen Holding Ltd. (YSG)||0.95||0.5||122.2|
|Coty Inc. (WHAT ABOUT YOU)||11.12||9.5||77.4|
|Russell 1000 Index||ON||ON||4.1|
|S&P 500 Consumer Goods Sector Index||ON||ON||-0.9|
|S&P 500 Consumer Discretionary Index||ON||ON||5.2|
- elf Beauty Inc.: See company description above.
- Yatsen Holding Ltd.: Yatsen is a Chinese holding company that manufactures and sells cosmetics and skin care products. After going public at $18.40 per share in November 2020, Yatsen fell during 2021 to an all-time low of 39 cents per share in May 2022. The stock price has since doubled, but remains well below its former highs.
- Coty Inc.: See company description above.
Risks of cosmetics warehouses
Many cosmetics consumers expect manufacturers to offer a robust and constantly improving line of products. This puts considerable pressure on cosmetics companies to continue to innovate and accurately assess and predict trends. Because creating and bringing new products to market is expensive, companies often have to take big risks to keep up with the competition.
The creation and production of cosmetic products also exposes companies to countless risks. For example, obtaining raw materials can be difficult. And cosmetic companies can be found liable for environmental damage caused by the production or adverse health effects of the products. Consumers may not consider these risks, but they can affect a cosmetics company’s profits, sales and stock performance.
Advantages of cosmetics warehouses
Cosmetics companies have the advantage of occupying space for both everyday and luxury consumer goods. This can allow them to diversify their product offering to weather economic cycles. As the economy weakens, consumers tend to cut back on luxury purchases, perhaps giving an advantage to beauty companies that focus on a lower price point. The opposite can be true in an economic boom.
Another advantage of the cosmetics industry is its rapid growth. The global cosmetics market was valued at more than USD 262 billion in 2022 and is projected to expand compound annual growth rate (CAGR) of 4.2% by 2030. Growth may be driven by increased use of skin care and personal care products and demand from an aging global population.
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