,
22 tweets,
5 min read
Read on Twitter
$ELF is in early stages of a successful turnaround. This stock will go up 2-3x over the next year.
$ELF brand is relevant again. Huge upside from multiple expansion and positive earnings revisions. 
One of the key drivers behind this turnaround is an activist Marathon Partners and @mariocibelli who have put pressure on $ELF management to improve business performance. Yet there is more work to do. Management's compensation remains too high, corp gov has room for improvement!
The turnaround at $ELF started after 1) Marathon took activist approach and 2) Gayitri Budhraja was appointed as VP of Brand (August 2018).
VP of Brand at ELF among other things is responsible for work with influencers. In my view, Gayitri Budhraja as VP of Brand has done extraordinary job as she signed Jeffrey Star, one of the most well-known influencers in the industry.
What happens when a struggling tiny company like ELF signs a SUPERSTAR beauty influencer like Jeffree Star with tens of millions of followers? Engagement goes up exponentially! Check out this video
$ELF long thesis in one paragraph
Revenue guidance is just laughably low $ELF
A couple of points how I see advertising ROI of $ELF
In the last quarter the company increased advertising expense from 4% of revenue to 7% of revenue
On $66M revenue that is $2M of incremental ad spend
At the same time $ELF beat revenue by $8-10M during the quarter
My math tells me that ROI is quite good here
$ELF is the best way to bet on Instagram Checkout feature, which is at the core of $FB transition to social commerce platform
A number of cosmetics brands are participating in a beta test of this feature. $ELF has 4.5M follwers on Insta. When $ELF joins Instagram Checkout, they will get a huge e-commerce store with huge audience for free. How much would you pay for that?
And Instagram Checkout is already showing its efficiency, as per Adidas
"Instagram Checkout is going to be extremely profitable for your business" $ELF @mariocibelli
$ELF
$ELF
From $ULTA call:
$ELF @mariocibelli
Project Unicorn seems to be working $ELF
