e.l.f. Beauty Sees Stock Soar 50% in Blockbuster IPO by John Kell @FortuneMagazine September 22, 2016, 12:01 PM EDT E-mail Tweet Facebook Linkedin Share icons They say beauty is in the eye of the beholder. Well, Wall Street investors love the look of e.l.f. Beauty—and they are clamoring to own a piece of the newly public cosmetics brand. Shares e.l.f. Beauty—only the third beauty products brand to launch an initial public offering in the past decade—soared more than 50% from the offering price of $17 to trade above $25 per share in Thursday afternoon trading. The debut is the first for a consumer sector brand since Amplify Snack Brands betr went public a little over a year ago with a disappointing debut. e.l.f. Beauty (the acronym stands for for eyes, lips and face) is aiming to tackle the $57 billion global cosmetics market with a sales pitch that it can tackle the white space between high-priced prestige brands and mass-market items that are less innovative. The company, which was founded in 2004 by father-son entrepreneurs Alan and Joey Shamah, says most of its items retail for $6 or less—allowing users an opportunity to try their beauty products with a low price barrier. A trio of eyeshadow items, for example, retail for $4 versus rival brands for as much as $28. The company says it has particularly strong appeal with millennials and Hispanics—two fast-growing demographic groups in terms of purchasing power in the U.S. Net sales soared from $83 million in 2012 to $191 million last year. e.l.f. Beauty is also profitable. “e.l.f. Beauty’s cosmetics were always focused on diverse consumers and millennials long before it was fashionable to do so,” Chief Executive Tarang Amin told Fortune. “We don’t believe women should have to pay high for luxurious beauty products. And we believe in serving all women.” The company’s 43% retail sales growth in 2015 is far faster than bigger, established brands like Revlon rev , L’Oreal and Cover Girl. Albeit, e.l.f. Beauty only commands 2.3% of the $8 billion U.S. mass cosmetics market. That means sales growth will likely continue to look impressive—if the company is able to steal additional market share. Amin says e.l.f. Beauty differs from rivals because it doesn’t rely on traditional big-budget ad campaigns and celebrity endorsements. Instead, it is rooted in e-commerce and direct-to-consumer relations through social media channels—essentially relying on loyal customers to spread the brand’s word. It sells its products at around 19,000 retail stores in the U.S., with Walmart wmt , Target tgt and CVS Health cvs among the largest customers. e.l.f. Beauty says it sees particularly strong demand from millennials and Hispanic shoppers.Courtesy of e.l.f. Beauty National and international retailers comprised 87% of e.l.f.’s total sales last year, with 13% coming form direct-to-consumer channels. Amin says that growth is balanced. The success at big retailers implies that e.l.f. could earn more additional shelf space down the road. The company is also opening its own stores. It has nine locations in the New York City metropolitan area and two in Los Angeles. Because it only began to open brick-and-mortar locations in 2013, that remains a somewhat untested aspect of the company’s business—though also a possible opportunity. IPO ETF manager Renaissance Capital notes e.l.f. Beauty’s IPO debut is stronger than the other two beauty products companies over the past decade. Though to be fair, Coty coty —which went public in 2013—is a far more established company in terms of size and growth potential. Coty ended its first day of trading down 0.8% but has since risen 36%. Physicians Formula raised $128 million in 2006 and popped 16%, but only sold for $75 million in 2012. The company has said that it will use the IPO proceeds to repay debt and for working capital purposes.