Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
e.l.f. Beauty, Inc., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
An analysis of the cash flow trajectory from March 31, 2020, to March 31, 2024, reveals a period of initial contraction followed by a significant surge and subsequent stabilization. Both net cash provided by operating activities and free cash flow to the firm (FCFF) exhibited a synchronized downward trend during the first three years of the period before experiencing a substantial increase in 2023.
- Net Cash Provided by Operating Activities
- Operating cash flows declined steadily from US$ 44.3 million in 2020 to a low of US$ 19.5 million in 2022. This downward trend was abruptly reversed in 2023, with a sharp increase to US$ 101.9 million, representing the peak of the period. A correction occurred by March 31, 2024, as the value moderated to US$ 71.2 million, though it remained significantly higher than pre-2023 levels.
- Free Cash Flow to the Firm (FCFF)
- The FCFF mirrored the volatility seen in operating activities, falling from US$ 39.7 million in 2020 to US$ 16.3 million in 2022. A dramatic expansion occurred in 2023, where FCFF surged to US$ 103.6 million. This was followed by a decrease to US$ 72.7 million in 2024. The high degree of correlation between operating cash flow and FCFF suggests that the primary drivers of firm value and liquidity are rooted in core operational performance.
- Comparative Cash Flow Dynamics
- From 2020 to 2022, FCFF remained consistently lower than net cash provided by operating activities, indicating positive capital expenditures during those years. However, a shift occurred in 2023 and 2024, where FCFF slightly exceeded net cash from operating activities. This inversion suggests a period where the firm may have reduced capital expenditures or realized gains from asset disposals, thereby increasing the total cash available to the firm relative to its operating cash generation.
AI Ask an analyst for more
Interest Paid, Net of Tax
e.l.f. Beauty, Inc., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
2 2024 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 11,271 × 9.50% = 1,071
An analysis of the five-year period ending March 31, 2024, reveals a U-shaped trajectory in cash paid for interest, net of tax, occurring alongside a general downward trend in the effective income tax rate (EITR).
- Cash Paid for Interest, Net of Tax
- A period of contraction was observed between 2020 and 2022, with cash outflows for interest decreasing from 4,815 thousand US dollars to a low of 1,562 thousand US dollars. This downward trend reversed sharply starting in 2023, with payments increasing to 3,435 thousand US dollars and peaking at 10,200 thousand US dollars by March 31, 2024. The final year's expenditure represents a significant increase of approximately 551% compared to the 2022 trough and more than double the initial 2020 level.
- Effective Income Tax Rate (EITR) Trends
- The EITR exhibited a consistent decline for four consecutive years, falling from 25.70% in 2020 to a minimum of 4.00% in 2023. A slight reversal occurred in 2024, where the rate rose to 9.50%. Despite this recent uptick, the tax rate remains substantially lower than the levels recorded at the beginning of the analyzed period.
- Correlation and Fiscal Impact
- The substantial rise in net interest paid in 2024 is particularly notable because it occurred while the EITR remained relatively low (9.50%) compared to 2020 (25.70%). Because a lower tax rate reduces the tax shield benefit of interest expenses, the sharp increase in the net cash outflow suggests a significant escalation in the underlying gross interest obligations during the 2023 and 2024 fiscal years.
AI Ask an analyst for more
Enterprise Value to FCFF Ratio, Current
e.l.f. Beauty, Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 9,222,862) |
| Free cash flow to the firm (FCFF) | 72,695) |
| Valuation Ratio | |
| EV/FCFF | 126.87 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Procter & Gamble Co. | 23.06 |
| EV/FCFF, Industry | |
| Consumer Staples | 36.91 |
Based on: 10-K (reporting date: 2024-03-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
e.l.f. Beauty, Inc., historical EV/FCFF calculation, comparison to benchmarks
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 10,489,807) | 5,555,934) | 1,340,991) | 1,541,824) | 921,139) | |
| Free cash flow to the firm (FCFF)2 | 72,695) | 103,595) | 16,257) | 25,493) | 39,706) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 144.30 | 53.63 | 82.49 | 60.48 | 23.20 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Procter & Gamble Co. | 24.36 | 27.39 | 26.63 | 22.86 | — | |
| EV/FCFF, Industry | ||||||
| Consumer Staples | 31.10 | 30.22 | 30.06 | 20.91 | — | |
Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 10,489,807 ÷ 72,695 = 144.30
4 Click competitor name to see calculations.
The entity's valuation metrics indicate a period of aggressive expansion and increasing market premiums between 2020 and 2024. While the enterprise value has grown exponentially, the corresponding growth in free cash flow has been more volatile, leading to a significant expansion in the valuation multiple.
- Enterprise Value (EV) Trajectory
- A substantial increase in Enterprise Value is observed, rising from 921.1 million US$ in 2020 to 10.49 billion US$ in 2024. The most pronounced growth occurred between 2022 and 2024, during which the valuation increased by approximately 683%.
- Free Cash Flow to the Firm (FCFF) Dynamics
- Cash flow generation showed a downward trend from 2020 to 2022, dropping from 39.7 million US$ to 16.3 million US$. This was followed by a sharp increase to 103.6 million US$ in 2023 and a subsequent correction to 72.7 million US$ in 2024, indicating fluctuating operational cash efficiency relative to the overall scale of growth.
- EV/FCFF Ratio Analysis
- The EV/FCFF ratio has expanded from 23.20 in 2020 to 144.30 in 2024. The significant rise in this ratio, particularly the leap from 53.63 in 2023 to 144.30 in 2024, suggests that the market is attributing a high premium to the entity, pricing in substantial future growth expectations that far exceed current free cash flow generation.
AI Ask an analyst for more