Oddity Tech Ltd (NASDAQ: ODD ) maintained an Overweight rating and $50.00 price target from KeyBanc on Tuesday after beating earnings estimates for its fourth consecutive quarter. The positive performance was attributed to an increase in orders and average order value (AOV) growth of approximately 6% year-on-year. Oddity Tech also raised its 2024 guidance slightly.
The company’s growing percentage of sales from repeat customers shows a growing customer base. A higher percentage of repeat customer sales is expected in fiscal 2024 compared to fiscal 2023, which is seen as a positive sign. Oddity Tech’s IL MAKIAGE and SpoiledChild brands both achieved double-digit growth this quarter. In addition, the company’s revenue growth was partly due to the successful launch of its new skin care product line under IL MAKIAGE.
To strengthen its scientific capabilities, Oddity Tech announced the appointment of Dr. Ido Bachelet as Chief Scientific Officer to lead ODDITY LABS. Dr. Bachelet’s expertise in expanding biotechnology laboratories is expected to significantly enhance the company’s molecule creation platform.
KeyBanc’s analysis suggests that Oddity Tech is still in the early stages of its growth trajectory and could benefit from disrupting the beauty and wellness market in the short term. The company also sees long-term growth prospects from Oddity Tech’s unique technology and biotech assets. The expansion of ODDITY LABS’s molecular discovery platform is expected to not only accelerate revenue for existing brands but also enhance the launch prospects of the company’s third and fourth brands that will leverage this biotech asset.
KeyBanc believes Oddity Tech is currently trading at an attractive valuation of approximately 13.5 times next 12 months (NTM) adjusted EBITDA. Although Oddity Tech expects revenue to grow by more than 20% and profit margins to exceed 20% in the next few years, the ratio is slightly higher than the industry average of about 13.0 times.
In other recent news, Oddity Tech reported record second-quarter fiscal 2024 results, with significant revenue and profitability growth. The company’s revenue surged 28% to $404 million, and adjusted EBITDA and free cash flow increased to $110 million and $104 million, respectively. This strong financial performance is attributed to strategic investments in technology, which enhances the company’s scalability and profitability.
In addition, Oddity Tech also announced the development of ODDITY LABS and is expected to launch Brand 3 and Brand 4. Looking ahead, the company raised its full-year 2024 guidance, projecting net revenue in the range of $633 million to $640 million.
Despite the upfront costs and potential challenges from tariffs and duties, Oddity Tech remains optimistic about its growth prospects. The company plans to maintain a 20% growth rate and has the ability to cope with supply chain and tariff challenges. These latest developments demonstrate Oddity Tech’s commitment to innovation and delivering on its commitments to shareholders.
Investment Professional Insights
As Oddity Tech Ltd’s (NASDAQ: ODD ) earnings and growth trajectory continue to exceed expectations, new data from InvestingPro provides further insight into the company’s financial health and market position. Oddity Tech’s market capitalization adjusted to $2.16 billion, standing out in the market. The company’s forward-looking P/E ratio currently stands at 25.48 and is expected to adjust to a more favorable 21.67 in the near future. The change reflects the company’s expected earnings growth and could make its stock more attractive to value investors.
InvestingPro data also highlights Oddity Tech’s impressive gross margin of nearly 72% for the trailing 12 months ending in the second quarter of 2024. In addition, the company’s revenue growth has been strong, up 31.47% in the trailing 12 months to the second quarter of 2024, which is in line with the positive sales trend mentioned in KeyBanc’s analysis.
Two InvestingPro Tips that are particularly relevant to Oddity Tech investors are the company’s impressive gross margins and the forecast that the company will be profitable this year. These insights show that Oddity Tech is not only growing its top line, but also managing to convert sales into meaningful profits. For those interested in learning more, InvestingPro provides additional tips on Oddity Tech’s financial and market performance, providing investors with comprehensive tools to make informed decisions.
Overall, InvestingPro data and tips contribute to Oddity Tech’s positive outlook, supporting an Overweight rating and $50.00 price target set by KeyBanc. Investors can find more valuable insights and tips about Oddity Tech by visiting InvestingPro, which provides a total of 11 additional tips for the company.
This article was generated with the support of artificial intelligence and reviewed by an editor. For more information, please see our terms and conditions.
