The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of investors who purchased e.l.f. Beauty, Inc. (“Elf” or the “Company”) (NYSE: ELF) securities between May 25, 2023 and February 6, 2025, inclusive (the “Class Period”). Elf investors have until May 5, 2025 to file a lead plaintiff motion.

What Happened?

On November 20, 2024, Muddy Waters Research published a report alleging, among other things, that Elf had “materially overstated revenue over the past three quarters,” and that, in the second quarter of 2024, the Company “began reporting inflated revenue and profits” as well as inventory “to account for cash that has not really come in.”

On this news, Elf’s stock price fell $2.71, or 2.2%, to close at $119.00 per share on November 20, 2024, thereby injuring investors.

What Is The Lawsuit About?

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) contrary to its representations to investors, the Company was experiencing rising inventory levels as a consequence of flagging sales; (2) Elf falsely attributed the rising inventory levels to, among other things, changes in its sourcing practices; (3) to maintain investor confidence, Elf reported inflated revenue, profits, and inventory over several quarters; (4) accordingly. the Company’s business and/or financial prospects were overstated; (5) all of the foregoing, once revealed, would likely have a material negative impact on the Company; and (6) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.