e.l.f. Beauty Stock Eyes Best Day Ever After Earnings

ELF reported a Q3 profit beat and raised the low end of its full-year earnings forecast

The shares of e.l.f. Beauty Inc (NYSE:ELF) are up 18.8% this morning to trade at $13.19 -- on track for their best day ever -- after the discount cosmetics retailer reported adjusted third-quarter profit of 17 cents per share on $64 million in revenue, more than analysts were expecting. The company also raised the low end of its full-year adjusted income and earnings guidance.

Analysts have been quick to chime in on ELF after earnings, with no fewer than four brokerages raising their price targets on the stock. The most optimistic outlook came from BMO, which upped its ELF price target to $14 from $13, a level the equity has not surpassed on a daily closing level since before a mid-August earnings-induced bear gap.

Overall, though, most analysts remain skeptical of ELF stock, with 10 of the 13 in coverage maintaining a "hold" or "strong sell" recommendation. This pessimism is seen elsewhere, with 6.16 million e.l.f. Beauty shares currently dedicated to short interest -- representing nearly 28% of the stock's available float, or 14.5 times the average daily pace of trading.

Looking at the charts, it's not hard to see why sentiment is so bearish toward ELF. Heading into today's trading, the retail stock was down more than 50% year-to-date. And while the shares have broken out above their 50-day moving average -- a trendline that contained a rally off their Aug. 9 record low of $9.30 -- they now have to contend with $14. This former layer of support has served as a ceiling since ELF stock's August plunge.