e.l.f. Beauty, Inc. (NYSE:ELF)

Return on Assets (ROA)

The Return on Assets exhibited an overall upward trend from mid-2020 through mid-2024. Initially, the ROA started at 3.4% in June 2020 and declined to a low of around 1.23% by December 2020. From early 2021 onward, it steadily improved, reaching a peak of 16.28% in September 2023. After this peak, the ROA showed a moderate decline, settling near 10.15% by June 2024. This pattern indicates increasing efficiency in asset utilization over time, with a notable surge in profitability beginning in early 2022 and sustained levels above 10% in the most recent quarters.

Financial Leverage

Financial leverage showed a gradual decrease from 1.86 in June 2020 to a low of approximately 1.39 in June 2023, suggesting a reduction in the use of debt relative to equity over this period. However, from mid-2023 onwards, leverage ratios increased slightly, reaching around 1.80 by March 2024 before a minor decline to 1.71 by June 2024. The overall fluctuation indicates cautious adjustments in capital structure, balancing between risk and growth financing strategies.

Return on Equity (ROE)

The Return on Equity mirrored the general improvement seen in ROA but with amplified magnitudes, rising from 6.31% in June 2020 to a peak of 23.55% in September 2023. After this peak, ROE experienced a decrease to 17.37% by June 2024. The strong upward trajectory from early 2021 to late 2023 reflects increasing profitability and effective equity use. The subsequent decline may indicate a normalization phase or external factors impacting net returns to shareholders.

Summary

The data reveal a consistent improvement in profitability metrics over the analyzed period, highlighted by marked growth in both ROA and ROE. The decline in financial leverage until mid-2023, followed by a mild increase, suggests strategic management of debt levels in alignment with profitability enhancements. The peaks observed in late 2023 across profitability indicators suggest a period of exceptional performance, with recent quarters showing some reversion towards more moderate yet still strong returns.

The financial data reveals several key trends regarding profitability, efficiency, leverage, and overall return on equity (ROE) over the observed periods.

Net Profit Margin

The net profit margin exhibits a general upward trend, starting at 5.46% and experiencing fluctuations before reaching a peak of 15.88%. After this peak, a gradual decline is observed, ending at 10.8%. This pattern indicates an initial improvement in profitability followed by some contraction, though margins remain significantly higher than the initial periods.

Asset Turnover

Asset turnover shows steady improvement over the timeline, rising from 0.62 to a high point of 1.03. After this peak, a slight reduction occurs, settling near 0.94. The progressive increase in asset turnover indicates enhanced operational efficiency, reflecting better utilization of assets to generate revenue.

Financial Leverage

Financial leverage follows a downward trajectory initially, decreasing from 1.86 to a low of 1.39, suggesting a deleveraging phase or reduction in reliance on debt financing. However, leverage begins to increase again toward the later periods, suggesting a modest return to higher debt or financial obligations, ending at 1.71.

Return on Equity (ROE)

ROE mirrors the trends observed in net profit margin and asset turnover, starting from 6.31% and showing consistent growth, peaking at 23.55%. A subsequent decline occurs, but ROE remains robust at 17.37%. This indicates that the company was able to improve overall shareholder returns substantially before experiencing some easing, while maintaining a strong return relative to early periods.

In summary, the data reflects a phase of considerable improvement in profitability and operational efficiency, supported by reduced financial leverage initially. Toward the most recent periods, the company appears to be balancing increased leverage with sustaining elevated profitability and returns, although at levels slightly below peak performance. The general positive trends suggest enhanced financial health with some caution warranted due to recent moderations.

Net Profit Margin

The net profit margin exhibits an overall upward trend from mid-2020 through mid-2024. Initially fluctuating at relatively low levels around 2% to 5%, it steadily increases beginning in mid-2021, reaching a peak of approximately 15.88% in the third quarter of 2023. After this peak, there is a moderate decline to around 10.8% by mid-2024. This pattern indicates improving profitability over the period, with a noticeable acceleration in profit generation starting in late 2021, followed by a slight contraction in the most recent quarters.

Asset Turnover

Asset turnover shows a general improvement across the timeframe analyzed. Starting at 0.62 in mid-2020, the ratio demonstrates gradual growth, surpassing 1.0 briefly in late 2023, which suggests increasing efficiency in using assets to generate sales. However, this upward momentum is interrupted by a decline to approximately 0.8 in early 2024, followed by a slight recovery to around 0.94 by mid-2024. The trend points to enhanced operational efficiency over most of the period, with some retracement in asset utilization efficiency in the latest quarters.

Return on Assets (ROA)

Return on Assets mirrors the improvements seen in net profit margin and asset turnover, indicating an overall enhancement in the company's ability to convert its assets into net income. Beginning at a modest 3.4% in mid-2020, the ROA increases steadily, peaking at 16.28% in late 2023. This strong growth phase aligns with the period of improved net profit margin and asset turnover. Subsequently, ROA declines moderately to about 10.15% by mid-2024, yet remains significantly higher than the initial values recorded in 2020. This trend reflects growing operational profitability and asset efficiency through most of the period, tempered by a slight downturn in recent quarters.