Choosing the right stock in the household and personal products sector requires understanding how companies innovate and capture market share. The Clorox Company (CLX), a century-old leader known for cleaning and wellness products, faces off against e.l.f. Beauty, Inc. (ELF), a dynamic player in cosmetics and skincare. Both headquartered in Oakland and sharing industry space, their strategies and growth prospects differ markedly. This article will help you decide which company deserves a place in your investment portfolio.
Table of contents
Companies Overview
I will begin the comparison between The Clorox Company and e.l.f. Beauty, Inc. by providing an overview of these two companies and their main differences.
The Clorox Company Overview
The Clorox Company operates globally in the household and personal products industry, with a focus on health and wellness, household, lifestyle, and international segments. It manufactures cleaning, disinfecting, personal care, and food service products under well-known brands like Clorox, Glad, and Burt’s Bees. Founded in 1913 and headquartered in Oakland, CA, Clorox markets primarily through mass retailers, grocery outlets, and e-commerce channels.
e.l.f. Beauty, Inc. Overview
e.l.f. Beauty, Inc. is a cosmetics and skin care company offering products under brands such as e.l.f. Cosmetics and Well People. Founded in 2004 and also based in Oakland, CA, it sells eye, lip, face, and skin care products globally through retailers and direct-to-consumer e-commerce platforms. The company focuses on accessible beauty products and has a smaller workforce compared to Clorox.
Key similarities and differences
Both companies operate in the consumer defensive sector and share a base in Oakland, CA, with strong e-commerce sales channels. However, Clorox’s business model spans a broader array of household and wellness products with a global footprint and diverse brand portfolio, while e.l.f. Beauty specializes in cosmetics and skin care, targeting a niche market with fewer employees and lower market capitalization. Their beta values also differ, indicating varying volatility levels.
Income Statement Comparison
This table compares key income statement metrics for The Clorox Company and e.l.f. Beauty, Inc. based on their most recent fiscal year financial results.
| Metric | The Clorox Company (CLX) | e.l.f. Beauty, Inc. (ELF) |
|---|---|---|
| Market Cap | 13B | 4.9B |
| Revenue | 7.1B | 1.3B |
| EBITDA | 1.4B | 206M |
| EBIT | 1.2B | 162M |
| Net Income | 810M | 112M |
| EPS | 6.56 | 1.99 |
| Fiscal Year | 2025 | 2025 |
Income Statement Interpretations
The Clorox Company
The Clorox Company’s revenue remained relatively stable from 2021 to 2025, with a slight decline of 3.23% overall, while net income increased by 14.08%. Margins improved, with gross margin at 44.96% and net margin rising to 11.4%. In 2025, net income and EPS growth accelerated significantly, reflecting stronger profitability despite flat revenue.
e.l.f. Beauty, Inc.
e.l.f. Beauty displayed robust revenue growth of 312.91% over the period, accompanied by an impressive 1698.6% increase in net income. Gross margin was high at 71.24%, though net margin was lower at 8.53%. The latest year showed 28.28% revenue growth but a decline in net margin and EPS, indicating some margin pressure despite expanding sales.
Which one has the stronger fundamentals?
Both companies show favorable income statements, yet The Clorox Company maintains more stable margins and consistent profitability improvements, whereas e.l.f. Beauty exhibits rapid top-line and bottom-line growth with higher volatility in margins and earnings per share. The Clorox’s steadier margin expansion contrasts with e.l.f.’s recent margin compression despite strong growth.
Financial Ratios Comparison
This table presents a side-by-side comparison of key financial ratios for The Clorox Company (CLX) and e.l.f. Beauty, Inc. (ELF), based on their most recent fiscal year data.
| Ratios | The Clorox Company (CLX) | e.l.f. Beauty, Inc. (ELF) |
|---|---|---|
| ROE | 2.52% | 14.73% |
| ROIC | 24.14% | 11.21% |
| P/E | 18.31 | 31.49 |
| P/B | 46.20 | 4.64 |
| Current Ratio | 0.84 | 3.05 |
| Quick Ratio | 0.57 | 2.00 |
| D/E (Debt to Equity) | 8.97 | 0.41 |
| Debt-to-Assets | 51.79% | 25.08% |
| Interest Coverage | 11.67 | 9.20 |
| Asset Turnover | 1.28 | 1.05 |
| Fixed Asset Turnover | 4.44 | 45.63 |
| Payout ratio | 74.32% | 0% |
| Dividend yield | 4.06% | 0% |
Interpretation of the Ratios
The Clorox Company
The Clorox Company shows a generally favorable financial profile with strong net margin at 11.4%, ROE at 252.34%, and ROIC at 24.14%. However, liquidity ratios such as current ratio (0.84) and quick ratio (0.57) are weak, and the debt-to-equity ratio is high at 8.97, suggesting leverage concerns. The company offers a dividend yield of 4.06%, supported by a sustainable payout ratio and free cash flow coverage.
e.l.f. Beauty, Inc.
e.l.f. Beauty presents a mixed ratio picture: neutral net margin (8.53%) and ROE (14.73%), but an unfavorable ROIC (11.21%) and high WACC (11.49%). Liquidity is strong with a quick ratio of 2.0, while debt metrics such as debt-to-equity (0.41) and debt-to-assets (25.08%) are favorable. The firm does not pay dividends, likely prioritizing reinvestment and growth.
Which one has the best ratios?
The Clorox Company holds a more favorable overall ratio profile with 57.14% favorable metrics versus 42.86% for e.l.f. Beauty. While Clorox’s leverage and liquidity ratios raise caution, its strong profitability and dividend yield contrast with e.l.f.’s neutral stance and absence of dividends, making Clorox’s ratios comparatively stronger.
Strategic Positioning
This section compares the strategic positioning of The Clorox Company and e.l.f. Beauty, Inc. in terms of market position, key segments, and exposure to technological disruption:
The Clorox Company
- Large market cap of 13B USD, diversified segments face moderate competitive pressure.
- Operates in Health and Wellness, Household, Lifestyle, and International segments.
- No explicit data on disruption; operates in traditional consumer products sectors.
e.l.f. Beauty, Inc.
- Smaller market cap of 4.9B USD, operates in competitive cosmetics market.
- Focused on cosmetics and skin care products under multiple brands globally.
- No explicit data on disruption; sells mainly through retailers and e-commerce.
The Clorox Company vs e.l.f. Beauty, Inc. Positioning
The Clorox Company has a diversified business model across multiple consumer product segments, offering broader revenue streams. e.l.f. Beauty concentrates on cosmetics and skin care, which may limit diversification but allows focused brand development.
Which has the best competitive advantage?
The Clorox Company shows a very favorable MOAT with ROIC well above WACC and growing profitability, indicating a durable competitive advantage. e.l.f. Beauty has a slightly unfavorable MOAT, shedding value despite increasing ROIC.
Stock Comparison
The stock price movements of The Clorox Company (CLX) and e.l.f. Beauty, Inc. (ELF) over the past 12 months reveal pronounced bearish trends, with ELF experiencing a sharper decline and higher volatility than CLX.
Trend Analysis
The Clorox Company’s stock declined by 30.01% over the past year, showing a bearish trend with deceleration. It ranged between a high of 169.3 and a low of 98.31, with volatility measured at a 19.09 standard deviation.
e.l.f. Beauty, Inc.’s stock fell by 53.44% during the same period, also bearish but with accelerating decline and greater volatility at a 43.02 standard deviation. The price fluctuated between 217.4 and 52.65.
Comparing both stocks, e.l.f. Beauty delivered the lowest market performance, suffering a steeper and more volatile drop than The Clorox Company over the past year.
Target Prices
Analyst consensus provides a clear outlook on target prices for The Clorox Company and e.l.f. Beauty, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| The Clorox Company | 152 | 94 | 118.33 |
| e.l.f. Beauty, Inc. | 165 | 85 | 128.17 |
The Clorox Company’s consensus target price of 118.33 suggests a moderate upside from its current 106.98 USD share price. e.l.f. Beauty, Inc.’s higher consensus of 128.17 indicates stronger growth expectations compared to its current 86.58 USD price.
Analyst Opinions Comparison
This section compares analysts’ ratings and financial scores for The Clorox Company and e.l.f. Beauty, Inc.:
Rating Comparison
CLX Rating
- Rating: B- with a very favorable assessment.
- Discounted Cash Flow Score: 5, very favorable.
- ROE Score: 1, very unfavorable.
- ROA Score: 5, very favorable.
- Debt To Equity Score: 1, very unfavorable.
- Overall Score: 3, moderate.
ELF Rating
- Rating: C+ with a very favorable assessment.
- Discounted Cash Flow Score: 3, moderate.
- ROE Score: 3, moderate.
- ROA Score: 3, moderate.
- Debt To Equity Score: 2, moderate.
- Overall Score: 2, moderate.
Which one is the best rated?
Based strictly on the data, CLX holds a better overall rating (B-) compared to ELF’s C+, driven by higher scores in discounted cash flow and return on assets despite weaker ROE and debt to equity scores.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for The Clorox Company and e.l.f. Beauty, Inc.:
The Clorox Company Scores
- Altman Z-Score: 3.27, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 5, showing average financial strength and investment quality.
e.l.f. Beauty, Inc. Scores
- Altman Z-Score: 3.44, also in the safe zone, showing low bankruptcy risk.
- Piotroski Score: 5, also indicating average financial strength and investment quality.
Which company has the best scores?
Both companies have Altman Z-Scores in the safe zone, with e.l.f. Beauty slightly higher at 3.44 versus Clorox’s 3.27. Their Piotroski Scores are equal at 5, reflecting similar average financial strength.
Grades Comparison
Here is a comparison of recent grades from recognized grading companies for The Clorox Company and e.l.f. Beauty, Inc.:
The Clorox Company Grades
The following table summarizes the latest ratings from major financial institutions for The Clorox Company:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| TD Cowen | Maintain | Hold | 2026-01-08 |
| Goldman Sachs | Maintain | Sell | 2026-01-07 |
| Wells Fargo | Maintain | Equal Weight | 2026-01-05 |
| Citigroup | Maintain | Neutral | 2025-12-17 |
| Morgan Stanley | Maintain | Equal Weight | 2025-11-04 |
| JP Morgan | Maintain | Neutral | 2025-11-04 |
| Wells Fargo | Maintain | Equal Weight | 2025-11-04 |
| Citigroup | Maintain | Neutral | 2025-11-04 |
| JP Morgan | Maintain | Neutral | 2025-10-10 |
| Citigroup | Maintain | Neutral | 2025-10-09 |
The grades for The Clorox Company consistently reflect a neutral to hold stance, with no upgrades or downgrades observed recently.
e.l.f. Beauty, Inc. Grades
Below is a summary of recent ratings from established grading firms for e.l.f. Beauty, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Piper Sandler | Maintain | Neutral | 2025-12-22 |
| JP Morgan | Maintain | Overweight | 2025-12-18 |
| Goldman Sachs | Maintain | Buy | 2025-11-07 |
| Baird | Maintain | Outperform | 2025-11-06 |
| Jefferies | Maintain | Buy | 2025-11-06 |
| Piper Sandler | Downgrade | Neutral | 2025-11-06 |
| UBS | Maintain | Neutral | 2025-11-06 |
| Canaccord Genuity | Maintain | Buy | 2025-11-06 |
| JP Morgan | Maintain | Overweight | 2025-11-06 |
| Jefferies | Maintain | Buy | 2025-10-28 |
e.l.f. Beauty, Inc.’s grades show a positive trend with several buy and outperform ratings, despite a single downgrade to neutral.
Which company has the best grades?
e.l.f. Beauty, Inc. has received generally stronger grades than The Clorox Company, with multiple buy and overweight ratings versus Clorox’s hold and neutral consensus. This divergence may influence investors looking for growth or higher conviction opportunities.
Strengths and Weaknesses
Below is a comparative overview of key strengths and weaknesses for The Clorox Company (CLX) and e.l.f. Beauty, Inc. (ELF) based on the most recent data.
| Criterion | The Clorox Company (CLX) | e.l.f. Beauty, Inc. (ELF) |
|---|---|---|
| Diversification | High: multiple segments including Health & Wellness (2.7B), Household (2.0B), International (1.1B), Lifestyle (1.3B) | Limited product segmentation; primarily beauty products |
| Profitability | Strong: ROIC 24.14%, Net Margin 11.4%, ROE 252.34% | Moderate: ROIC 11.21% (below WACC), Net Margin 8.53%, ROE 14.73% |
| Innovation | Consistent innovation with steady ROIC growth (+13.7%) and durable competitive advantage | Growing ROIC trend (+418%), but overall value destroying |
| Global presence | Significant international revenue (~1.1B USD) | Primarily domestic with limited global footprint |
| Market Share | Established brand with diversified portfolio | Growing niche brand in beauty sector |
Clorox demonstrates strong diversification and robust profitability with a durable moat, while e.l.f. Beauty shows promising innovation and growth but currently struggles with profitability and value creation. Investors should weigh stability against growth potential and risk accordingly.
Risk Analysis
Below is a comparative table outlining key risks for The Clorox Company (CLX) and e.l.f. Beauty, Inc. (ELF) based on the most recent fiscal year 2025 data:
| Metric | The Clorox Company (CLX) | e.l.f. Beauty, Inc. (ELF) |
|---|---|---|
| Market Risk | Moderate (Beta 0.575) | High (Beta 1.722) |
| Debt level | High (Debt/Equity 8.97; Debt/Assets 51.79%) | Low (Debt/Equity 0.41; Debt/Assets 25.08%) |
| Regulatory Risk | Moderate (Consumer products regulations) | Moderate (Cosmetics regulations) |
| Operational Risk | Moderate (Global supply chain exposure) | Moderate (Smaller scale, reliance on e-commerce) |
| Environmental Risk | Moderate (Sustainability initiatives ongoing) | Moderate (Increasing focus on eco-friendly products) |
| Geopolitical Risk | Moderate (International markets exposure) | Low to Moderate (Primarily U.S. and distributor channels) |
The most likely and impactful risks differ: Clorox faces higher leverage risk with considerable debt levels and international exposure, which could amplify geopolitical and operational risks. e.l.f. Beauty carries higher market volatility due to its elevated beta but benefits from lower debt, reducing financial risk. Both companies face moderate regulatory and environmental pressures in their sectors. Investors should weigh Clorox’s leverage concerns against e.l.f.’s market sensitivity when managing portfolio risk.
Which Stock to Choose?
The Clorox Company (CLX) has shown a favorable income statement with a 11.4% net margin and significant growth in EBIT and EPS over the past year. Its financial ratios are mostly favorable, including a strong return on equity of 252%, though it carries relatively high debt and a current ratio below 1. The company’s very favorable rating and very favorable moat status reflect durable competitive advantages and efficient capital use.
e.l.f. Beauty, Inc. (ELF) also reports a favorable income statement with a 8.53% net margin and strong revenue growth overall, although recent net margin and EPS growth have been negative. Financial ratios show a mixed picture with some favorable metrics like low debt and a strong quick ratio, but several unfavorable valuations and a slightly unfavorable moat due to value destruction despite improving profitability. Its rating is very favorable but with moderate overall scores.
For investors, CLX might appear more attractive for those prioritizing value investing and stable profitability due to its strong moat and consistent returns. In contrast, ELF’s rapid revenue expansion and improving profitability trends could appeal to growth-oriented investors willing to tolerate higher volatility and valuation risks. The choice could depend on whether an investor favors established durability or dynamic growth potential.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of The Clorox Company and e.l.f. Beauty, Inc. to enhance your investment decisions:
