E.l.f. Beauty (NYSE: ELF) has squeezed through a niche in the cosmetics industry and created an incredible brand presence. The company has demonstrated phenomenal growth and displayed resilience under pressure, and its stock is up 280% over the past three years.

Here are three reasons it's still a no-brainer buy.

1. It's a growth machine

There are few non-tech companies that can match e.l.f.'s recent growth. It's been a powerhouse sales machine that's been resilient despite inflation, and its growing, loyal fan base keeps buying. It has already established itself as a top mass brand, edging out legacy brands to claim consumer attention and dollars.

Its low prices draw shoppers all the time, and it's become even more popular as customers who might ordinarily splurge on luxury cosmetics switch down in the inflationary environment. However, its branding is impactful and resonates across demographics, attracting all kinds of shoppers even under better circumstances.

In the fiscal 2025 first quarter (ended June 30), sales increased 50% year over year, and gross margin expanded 0.8 percentage points. Adjusted earnings per share (EPS) were $1.10, and management raised guidance across the board.

At the same time that the color cosmetics industry declined 1%, e.l.f. sales increased 26%, and it gained 2.6 percentage points in market share while the giants in mass cosmetics have been losing. While skincare is up 1.4%, e.l.f. is up 45%. Management is taking the right actions to keep that up, engaging with shoppers online where they hang out and leveraging strong e-commerce and wholesale channels to provide a broad range of shopping options.

Even if you know nothing about cosmetics, you'll understand this standard model of creating an excellent product line that speaks its customers' language and a company that's profitable at scale. Expect a positive cycle as e.l.f. continues to scale and build its brand.

2. It's just getting started in international

E.l.f. serves 14 countries outside of the U.S. plus more through a global e-commerce distributor. International sales account for 16% of the total right now, but they increased 91% year over year in the first quarter. The potential here is enormous as the company debuts in new markets and launches products deliberately.

The company recently started selling in Germany with a partner in 1,600 locations, its largest ever international launch. It's entering Mexico through a deal with Sephora, and it's expanding its presence in the U.K., in addition to several other rollouts and expansions.

There's good reason to be confident about e.l.f.'s worldwide prospects. It's moved from the No. 8 position to the No. 4 position as top mass cosmetics brand in the U.K., and from No. 6 to No. 4 in Canada. It's the top mass makeup brand in the Netherlands.

3. The price is right

Nevertheless, e.l.f. stock plunged after the first-quarter report and is down 21% year to date. Despite an excellent first quarter and a raised outlook, investors were looking for more. Management is guiding for sales of $1.29 billion for the full year at the midpoint, whereas the average Wall Street estimate is $1.32 billion. EPS estimates were about $3.39, while analysts were looking for $3.52.

Guidance veering somewhat away from analyst expectations is never a good reason to sell a stock, but in this case, it could be that the market realized it was pricing e.l.f. stock too high. At these levels of expectation, some of the gains are already built into the price, and the stock can't sustain a valuation that's too premium.

Luckily for investors, the stock is now at a much more palatable valuation. At the current price, e.l.f. stock trades at a very reasonable 26 times forward one-year earnings. That's a great price for a high-growth stock with e.l.f.'s opportunities, and it's a bargain not to be missed.

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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends e.l.f. Beauty. The Motley Fool has a disclosure policy.

Don't Know Anything About Makeup? 3 Reasons e.l.f. Beauty Stock Is Still a No-Brainer Buy. was originally published by The Motley Fool