ELF BEAUTY INC (NYSE:ELF) Excels in Caviar Cruise Quality Stock Screen

The Caviar Cruise stock screening method uses a structured system to find quality investments with measurable financial data. This approach, built on quality investing ideas, looks for firms showing steady revenue and profit increases, good returns on invested capital, acceptable debt amounts, and reliable cash flow generation. Using these strict filters, investors can find businesses with lasting competitive strengths and reliable operational performance.

ELF BEAUTY INC (NYSE:ELF) appears as a notable candidate from this screening process, satisfying several points important for quality investors:

Exceptional Growth Trajectory The firm shows impressive growth basics with a 5-year revenue CAGR of 13.4%, greatly surpassing the screen's 5% minimum. More notably, ELF's EBIT growth of 45.8% over the same time is much higher than its revenue growth, showing rising profitability margins. This EBIT growth being greater than revenue growth implies the firm has pricing strength and operational effectiveness gains, key traits quality investors look for as they point to lasting competitive strengths rather than growth from too much capital spending.

Outstanding Capital Efficiency ELF's return on invested capital excluding cash, goodwill, and intangibles is 31.4%, over two times the screen's 15% minimum. This measurement is especially important for quality investors as it shows how well management uses capital to produce profits. A high ROIC means the firm can reinvest earnings at good rates of return, building a positive cycle of value creation that grows over time, precisely the kind of business quality investors prefer to hold long-term.

Strong Financial Health The firm keeps a careful debt position with a debt-to-free-cash-flow ratio of 1.9, much lower than the screen's highest limit of 5. This shows ELF could pay off all its debt in under two years using current free cash flow production, giving important financial adaptability and lowering risk in economic declines. For quality investors, this financial steadiness is critical as it lets the firm keep putting money into growth chances even in difficult market environments.

Superior Cash Conversion ELF's 5-year average profit quality of 150.6% is much higher than the 75% requirement, showing the firm turns accounting profits into real cash flow at a high rate. This reliable cash conversion is important for quality investors because it confirms the durability of reported earnings and supplies the firm with funds for shareholder returns, strategic purchases, or more growth investments without needing outside money.

The detailed fundamental analysis supports these screening outcomes, giving ELF a good rating of 6/10. The report points out very good profitability and health scores, with especially good margins that have gotten better over time. While the valuation seems high compared to wider market indexes, this extra cost may be reasonable given the firm's special growth story and reliable financial traits. The analysis mentions ELF's better performance on many profitability measurements compared to industry competitors, along with good liquidity and solvency positions.

For investors wanting to see more firms that satisfy the Caviar Cruise quality investing points, the full screening outcomes can be found using this dedicated stock screener link.

This analysis is given for information only and is not investment advice, a suggestion, or support for any security. Investors must do their own research and talk to a qualified financial advisor before making investment choices. Past results do not ensure future outcomes, and all investments have risk, including the possible loss of the original amount invested.