Shares of cosmetics maker Elf Beauty (NYSE:ELF) surged as much as 5.2% to $159.22 on Wednesday, with the stock last trading up around 3%, poised to break a two-day losing streak.
The rally comes after the company's board authorized a share repurchase program of up to $500 million of its common stock on Tuesday after markets closed.
As of the previous close, Elf Beauty had a market capitalization of $8.53 billion.
The move to repurchase shares is seen as a positive signal by investors, reflecting confidence in the company's long-term growth prospects.
Market sentiment towards Elf Beauty remains strong, with 12 out of 15 brokerages rating the stock as a "buy" or higher, and three recommending a "hold."
Despite the positive momentum, Elf Beauty faces challenges.
In early August, the company forecasted annual sales and profits below estimates, citing that price-conscious customers are becoming more cautious about spending, even on affordable luxuries like lipsticks and skincare products.
Including Wednesday's session gains, Elf Beauty's share price is up nearly 5% year-to-date.