ODDITY (NASDAQ:ODD) announced preliminary financial results for the third quarter (ended September 30) that exceeded management’s expectations. ODD stock gained over 12% in the after-hours following the announcement.
ODDITY leverages technology to build digital-first brands targeting the beauty and wellness industry. It uses proprietary technology, AI (Artificial Intelligence), computer vision, and molecular discovery platforms to develop its beauty products.
The Israel-based firm has announced that its third quarter is poised to become its strongest ever, with an expected net revenue increase of 29-30% compared to its earlier guidance of 18-23%. Additionally, the company projects a gross margin of 68.5% for Q3, surpassing its previous outlook of 67.5%.
As for the initial nine months of 2023, the company expects to deliver net revenue growth of at least 58% and adjusted EBITDA of at least $89 million. The company’s co-founder and CEO, Oran Holtzman, said, “We continue to consistently deliver high growth and outstanding profitability with both IL MAKIAGE and SpoiledChild brands and are building massive engines to further scale in 2024 and beyond.” The company is scheduled to disclose its third-quarter results in November.
While ODDITY’s stronger-than-expected preliminary Q3 financial results boosted its share price, ODD stock has reversed its IPO-led gains and is down over 43% since listing on the exchange. With this backdrop, let’s look at what the Street recommends for ODD shares.
Is ODDITY Stock a Buy or Sell?
Wall Street analysts are cautiously optimistic about ODDITY stock as its growth rate is moderating sequentially, raising valuation concerns.
With two Buy and five Hold recommendations, ODD stock has a Moderate Buy consensus rating on TipRanks. Meanwhile, given the recent correction in its share price, analysts’ 12-month average price target of $59 implies 110.11% upside potential from current levels.
