L’Oreal (OTCMKTS:LRLCY – Get Free Report) and e.l.f. Beauty (NYSE:ELF – Get Free Report) are both consumer staples companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.
Analyst Recommendations
This is a summary of current ratings and target prices for L’Oreal and e.l.f. Beauty, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| L’Oreal | 1 | 3 | 8 | 1 | 2.69 |
| e.l.f. Beauty | 1 | 5 | 10 | 2 | 2.72 |
L’Oreal presently has a consensus target price of $100.00, suggesting a potential upside of 12.41%. e.l.f. Beauty has a consensus target price of $92.12, suggesting a potential downside of 15.93%. Given L’Oreal’s higher probable upside, analysts clearly believe L’Oreal is more favorable than e.l.f. Beauty.
Volatility and Risk
Profitability
This table compares L’Oreal and e.l.f. Beauty’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| L’Oreal | N/A | N/A | N/A |
| e.l.f. Beauty | 3.38% | 14.07% | 6.81% |
Valuation and Earnings
This table compares L’Oreal and e.l.f. Beauty”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| L’Oreal | $49.83 billion | 4.75 | $6.93 billion | N/A | N/A |
| e.l.f. Beauty | $1.76 billion | 3.67 | $26.32 million | $1.00 | 109.58 |
L’Oreal has higher revenue and earnings than e.l.f. Beauty.
Institutional and Insider Ownership
0.4% of L’Oreal shares are owned by institutional investors. Comparatively, 92.4% of e.l.f. Beauty shares are owned by institutional investors. 3.5% of e.l.f. Beauty shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Summary
e.l.f. Beauty beats L’Oreal on 9 of the 13 factors compared between the two stocks.
About L’Oreal
L'Oréal S.A., through its subsidiaries, manufactures and sells cosmetic products for women and men worldwide. The company operates through four divisions: Consumer Products, L'oréal Luxe, Professional Products, and Dermatological Beauty. It offers skincare, make-up, hair colourants, haircare, perfumes, and hygiene products. The company provides its products under the L'Oréal Paris, Garnier, Maybelline New York, NYX Professional Makeup, Stylenanda, Essie, Dark & Lovely, Mixa, Magic Mask, Niley, Lancôme, Yves Saint Laurent, Armani, Kiehl's Since 1851, Helena Rubinstein, Biotherm, Shu Uemura, IT Cosmetics, Ralph Lauren Fragrance, Urban Decay, Mugler, Valentino, Viktor&Rolf, Azzaro, Prada, Cacharel, Maison Margela Fragrance, Diesel, Yue Sai, Atelier Colonge, Carita, Takami, Aesop, L'Oréal Professionnel Paris, Kérastase, Redken, Matrix, Pureology, Pulp Riot, La Roche-Posay, Vichy, CeraVe, SkinCeuticals, and Skinbetter Science brands. It sells its products through distribution channels, such as hair salons, local stores, e-commerce, travel retail, mass market retail, department store perfumeries, pharmacies, drug stores, medi-spas, and free-standing stores. L'Oréal S.A. was founded in 1909 and is headquartered in Clichy, France.
About e.l.f. Beauty
e.l.f. Beauty, Inc. is a holding company, which engages in the provision of inclusive, accessible, clean, vegan and cruelty free cosmetics and skin care products. The company focuses on the e-commerce, national retailers and international business channels. Its brands include elf, elf skin, WELL People and KEYS soulcare. The company was founded in 2004 and is headquartered in Oakland, CA.
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