3 Beauty & Cosmetic Stocks Set to Ride on the Next Wave of Growth

An updated edition of the July 16, 2025 article.

The beauty and cosmetics industry continues to thrive as one of the most resilient areas of consumer goods. Daily-use products keep demand stable, while constant innovation, from new skincare actives to trend-driven makeup drops, fuels ongoing consumer excitement. This blend of routine necessity and fast-paced product development gives the industry a strong foundation for steady growth.

Skincare remains the industry’s strongest growth engine, supported by rising interest in dermatology-backed formulas and ingredient transparency. Consumers are becoming more educated, more curious and more willing to spend on products that deliver visible results. Clean beauty, natural actives and wellness-led formulations continue to rise, driven largely by Gen Z and millennial shoppers who are prioritizing self-care and preventive routines.

Digital platforms are also reshaping how beauty is discovered and purchased. Social media trends, creator-led brands and influencer tutorials are turning niche products into overnight bestsellers, while omnichannel convenience and loyalty ecosystems help brands reach customers more efficiently. The rise of biotech beauty, AI-powered skin diagnostics, and virtual try-ons is adding another layer of growth, making beauty one of the most tech-enabled categories in retail.

Sustainability is equally central, with consumers pushing brands toward recyclable packaging, cruelty-free testing and responsibly sourced ingredients. Companies across the spectrum are responding — from Coty Inc. COTY investing in modernized, cleaner-leaning fragrance and cosmetics innovation to Sally Beauty Holdings SBH expanding professional-grade hair color, textured-hair care and DIY beauty assortments to meet evolving consumer needs. These shifts highlight how both prestige manufacturers and specialty retailers are adapting to the category’s rapid evolution.

With powerful trends spanning skincare, digital engagement, sustainability and wellness, the beauty and cosmetics industry remains a compelling space for investors seeking defensive strength and long-term opportunity. In line with these industry tailwinds, our Beauty & Cosmetics Screen surfaces three notable picks that appear well-aligned with the sector’s growth opportunities: Ulta Beauty, Inc. ULTA, The Estee Lauder Companies Inc. EL and Nu Skin Enterprises, Inc. NUS

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3 Beauty and Cosmetic Stocks in Focus

In an increasingly fragmented beauty landscape, where consumers flit between prestige, mass, wellness and digital-first indie brands, Ulta Beauty is positioning itself as the ultimate beauty curator. With its “Ulta Beauty Unleashed” framework, the company is strengthening its position as an omnichannel hub, combining in-store experiences, a powerful loyalty program and a rapidly evolving digital ecosystem. This strategy aims to engage beauty-savvy customers not just as shoppers but as community members while capturing long-term share as brand discovery continues to shift away from traditional retailers. 

A key strategic pillar is ULTA’s digital and marketplace expansion. The launch of UB Marketplace significantly broadens the company’s ability to onboard emerging and niche brands at speed while deepening engagement through its rewards ecosystem. Digital upgrades such as Replenish & Save, Split Cart, enhanced fulfillment options and richer app personalization have strengthened the bridge between online discovery and in-store convenience, helping Ulta Beauty reinforce its omnichannel leadership.

ULTA is also intensifying its focus on differentiated assortments and wellness innovation. The company introduced 24 new brands in the second quarter of fiscal 2026, including exclusives like isima by Shakira and expansions in prestige, fragrance and influencer-led lines, while scaling wellness assortments across hundreds of stores. Ulta Beauty’s recent acquisition of Space NK provides a physical gateway into international markets and bolsters the company’s premium beauty credentials. With a curated brand mix, digital acceleration and a growing wellness ecosystem, the Zacks Rank #2 (Buy) company is strategically aligned with the fastest-evolving trends shaping the beauty and cosmetics industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Estee Lauder Companies is repositioning its global portfolio for long-term relevance under its Beauty Reimagined roadmap. The strategy emphasizes meeting consumers where they shop, expanding in high-traffic digital ecosystems, and accelerating science-backed and clean-leaning product innovation across prestige categories. The company is seeing improving traction across key beauty hubs, driven by brands such as Le Labo, The Ordinary, Aveda and the flagship Estée Lauder brand, each benefiting from stronger innovation cycles and deeper consumer connection.

A major catalyst in EL’s transformation is its sharpened digital and omnichannel structure. The company has expanded its presence on Amazon’s Premium Beauty Store, rolling out storefronts for multiple brands across the United States, Canada, Mexico and the UK. At the same time, Estée Lauder has launched TikTok Shop activations for Clinique, M·A·C and Dr.Jart+ in the United States, with The Ordinary launching on TikTok Shop in Southeast Asian markets — a move designed to deepen recruitment among younger digital-native consumers. EL’s global partnership with Shopify is modernizing its direct-to-consumer infrastructure, creating a more flexible, data-driven omnichannel experience.

At the product level, this Zacks Rank #3 (Hold) company is focusing on innovations that reflect consumer demand for performance, transparency and cleaner formulations. In fragrances, new launches from Tom Ford, KILIAN PARIS, Jo Malone London and Aramis, along with continued strength from Le Labo, are driving category outperformance. In skincare, EL is expanding in high-growth areas such as acne care, longevity science and advanced eye care across prestige tiers. The company is also reinforcing sustainability and ingredient transparency through cleaner formulations and responsible sourcing initiatives — key priorities for today’s conscious beauty consumer.

In a beauty market rapidly converging with wellness, personalization and science-backed efficacy, Nu Skin is repositioning itself as an integrated “intelligent beauty and wellness” platform. The company is leaning into its strengths in device-led beauty and clinically aligned nutrition, aligning closely with consumer demand for visible, measurable results. As part of this evolution, Nu Skin is also advancing cleaner, more sustainable beauty through initiatives like eco-conscious packaging and traceable ingredient sourcing, reinforcing its commitment to responsible innovation. This shift reflects Nu Skin’s belief that beauty now blends skincare, wellness and helpful data insights.

At the product and technology level, Nu Skin continues to build on its established pillars while layering in next-generation diagnostics. Iconic franchises like ageLOC and Tru Face remain core to its premium anti-aging and skin-firming lineup, while the Pharmanex LifePak portfolio strengthens its ingestible wellness offering. The company’s newest innovation focus centers on combining these categories with intelligent measurement tools, led by Prysm iO, its portable carotenoid scanner paired with an AI-derived insights app. This device aims to create a measurable feedback loop for customers using skincare and supplements, supporting NUS’ strategy to deepen loyalty, drive repeat revenues and elevate its scientific credibility.

Commercially, Nu Skin is evolving its route-to-market model to match the behavior of modern beauty consumers. This Zacks Rank #3 company is adopting more digital-first, localized launch strategies in high-growth regions, expanding its presence in Latin America and preparing for entry into India with an adapted, locally relevant portfolio.

At the same time, Nu Skin is equipping its sales force with differentiated propositions, including device-led programs, subscription models and clinically framed product bundles, to increase customer lifetime value and strengthen market penetration. This combination of technology, science-driven product platforms and tailored global expansion underscores Nu Skin’s ambition to shift from a traditional seller of beauty products to a holistic, insights-powered beauty and wellness ecosystem.

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