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Olaplex Holdings (OLPX)
NASDAQ:OLPX
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Olaplex Holdings
(NASDAQ:OLPX)
58Neutral
Positive Factors
Earnings
OLPX reported 4Q24 results that came in ahead of guidance and Street expectations, leading to an adjusted EBITDA beat.
Market Positioning
The prestige haircare category has a substantial runway for growth, and management believes Olaplex is well positioned to capitalize on this trend.
Product Development
Better-than-expected performance from new launches including the No.5 leave-in conditioner and bond shaper curl salon treatment, indicating successful execution in product development.
Negative Factors
Financial Performance
EBITDA margin compression is expected to fall by ~9.5 percentage points at the mid-point as management aggressively invests in the US marketing.
International Business
OLPX highlighted a significant FY outlook reduction driven by expected weaker performance in its international business, requiring a reset for future growth.
Sales Growth
Marketing and sales efforts have not provided the expected lift for OLPX and will require more time to show results.
Olaplex Holdings (OLPX) vs. S&P 500 (SPY)
Market Cap
$877.30M
Dividend YieldN/A
Average Volume (3M)1.62M
Price to Earnings (P/E)45.1
Beta (1Y)1.33
Revenue Growth-7.77%
EPS Growth-68.65%
CountryUS
Employees231
SectorConsumer Cyclical
Sector Strength49
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.03
Shares Outstanding664,619,600
10 Day Avg. Volume1,937,758
30 Day Avg. Volume1,624,990
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.11
Price to Cash Flow (P/CF)4.50
P/FCF Ratio2.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.04Price Target Upside53.38% Upside
Rating ConsensusHold
Number of Analyst Covering9
Olaplex Holdings Business Overview & Revenue Model
Company DescriptionOlaplex Holdings, Inc. (OLPX) is a leading innovator in the haircare industry, specializing in scientifically-backed hair repair treatments. The company is renowned for its patented bond-building technology that helps restore and maintain hair health. Olaplex's product line includes shampoos, conditioners, and styling treatments that cater to both professional salons and retail consumers globally.
How the Company Makes MoneyOlaplex Holdings generates revenue primarily through the sale of its haircare products, which are distributed via multiple channels including professional salon distributors, specialty retailers, and direct-to-consumer online platforms. A key revenue stream is their professional segment, which involves selling high-performance hair repair treatments to salons, enabling stylists to offer specialized services. Additionally, Olaplex capitalizes on a strong retail presence, selling products through partnerships with major beauty retailers and e-commerce sites. The company's proprietary technology and strong brand loyalty contribute significantly to its earnings, positioning it as a leader in the premium haircare market.
Olaplex Holdings Financial Statement Overview
Summary
Olaplex Holdings faces challenges with declining revenue and profit margins, reflected in the income statement. The balance sheet remains stable with improved leverage management, though return on equity is low. Cash flow remains strong despite a decline in operating cash flow.Income Statement
Olaplex Holdings has experienced a decline in revenue from $458.3 million in 2023 to $422.67 million in 2024, indicating a negative revenue growth rate. The gross profit margin decreased from 69.5% in 2023 to 69.1% in 2024. The net profit margin also declined from 13.4% to 4.6%, reflecting a significant drop in profitability. This is further evidenced by the reduced EBIT and EBITDA margins. Overall, the income statement shows challenges in maintaining revenue and profitability.60
Neutral
Balance Sheet
The company's balance sheet reflects a stable equity position with an equity ratio of 49.4% in 2024, slightly improved from 48.5% in 2023. The debt-to-equity ratio has decreased to 0.74 from 0.78, indicating better leverage management. However, the return on equity has significantly dropped from 7.3% to 2.2%, highlighting reduced profitability for shareholders. Overall, the balance sheet shows stability but with a need for improved returns on equity.70
Positive
Cash Flow
Olaplex Holdings shows strong free cash flow with a stable operating cash flow of $143.07 million in 2024, although it decreased from $177.53 million in 2023. The free cash flow to net income ratio remains favorable, indicating good cash generation relative to profits. Despite a decline in operating cash flow, the company maintains positive cash flow dynamics, reflecting effective cash management.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 422.67M | 458.30M | 704.27M | 598.37M | 282.25M | Gross Profit |
| 292.29M | 318.63M | 519.55M | 473.82M | 179.59M | EBIT |
| 66.94M | 108.22M | 364.39M | 334.15M | 119.09M | EBITDA |
| 139.99M | 186.77M | 398.96M | 385.70M | 164.97M | Net Income Common Stockholders |
| 19.52M | 61.59M | 244.07M | 220.78M | 39.28M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 585.97M | 466.40M | 322.81M | 186.39M | 10.96M | Total Assets |
| 1.77B | 1.74B | 1.70B | 1.56B | 1.33B | Total Debt |
| 650.46M | 655.77M | 662.77M | 758.20M | 775.48M | Net Debt |
| 64.50M | 189.37M | 339.96M | 571.81M | 764.52M | Total Liabilities |
| 893.32M | 895.37M | 916.72M | 1.04B | 802.16M | Stockholders Equity |
| 874.40M | 844.97M | 780.96M | 524.30M | 530.67M |
| Cash Flow | Free Cash Flow | |||
| 143.07M | 173.92M | 254.67M | 198.26M | 128.95M | Operating Cash Flow |
| 143.07M | 177.53M | 255.32M | 200.03M | 128.97M | Investing Cash Flow |
| -4.89M | -3.61M | -2.68M | -6.26M | -1.38B | Financing Cash Flow |
| -18.61M | -30.33M | -116.22M | -18.34M | 1.26B |
Olaplex Holdings Technical Analysis
Negative
1.33
Price Trends
1.47
Negative
1.66
Negative
1.84
Negative
Market Momentum
-0.06
Positive
43.74
Neutral
37.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OLPX, the sentiment is Negative. The current price of 1.33 is below the 20-day moving average (MA) of 1.41, below the 50-day MA of 1.47, and below the 200-day MA of 1.84, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 43.74 is Neutral, neither overbought nor oversold. The STOCH value of 37.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OLPX.
Olaplex Holdings Risk Analysis
Olaplex Holdings disclosed 50 risk factors in its most recent earnings report. Olaplex Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Olaplex Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $17.17B | 14.60 | 50.39% | ― | 0.79% | -2.70% | |
73 Outperform | $1.24B | 10.89 | 7.19% | ― | -4.36% | -26.64% | |
59 Neutral | $12.27B | 11.11 | -0.54% | 3.71% | 1.45% | -20.42% | |
58 Neutral | $877.30M | 45.05 | 2.27% | ― | -7.77% | -68.65% | |
57 Neutral | $4.84B | 40.12 | 0.33% | ― | 1.35% | -99.94% | |
54 Neutral | $109.26M | ― | -6.58% | 3.31% | -0.54% | -78.88% | |
50 Neutral | $24.08B | 147.29 | -14.17% | 3.02% | 0.07% | -249.21% |
* Consumer Cyclical Sector Average
Performance Comparison
OLPX
Olaplex Holdings
1.32
-0.62
-31.96%
EL
The Estée Lauder Companies
65.42
-83.25
-56.00%
HELE
Helen Of Troy
54.02
-60.77
-52.94%
LCUT
Lifetime Brands
4.93
-5.68
-53.53%
ULTA
Ulta Beauty
359.47
-169.54
-32.05%
COTY
Coty
5.45
-6.44
-54.16%
Olaplex Holdings Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -3.62% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
Olaplex Holdings, Inc. showed strong innovation and product launch performance, particularly during the holiday season, and made significant progress in strengthening its leadership and financial discipline. However, the company faced challenges with declining sales and EBITDA, particularly in international markets and the professional channel, with marketing investments taking longer than expected to yield results.Highlights
Strong Performance of New Product Launches
The No. 5 Leave-In Conditioner outperformed expectations and remained a top-five SKU within its subcategory at Sephora by year-end. Olaplex Holdings, Inc. also had the number one set in US prestige hair care during the 2024 holiday season according to Circana data.
Improved Holiday Season Sales
Enhanced marketing efforts led to improving sales trends across channels and regions throughout the holiday season, with olaplex.com being a bright spot. The company was the top-performing US hair care brand during Black Friday and Cyber Monday.
Leadership and Team Building
Olaplex Holdings, Inc. strengthened its executive leadership with key hires such as Catherine Dunleavy as COO and CFO, Katie Goeman as Chief Marketing Officer, and Michelle Brett as Chief Revenue Officer.
Innovation in Hair Health
Launched No. 0.5 Scalp Longevity Treatment and announced plans for further innovation targeting foundational hair health, highlighting the company's focus on expanding beyond damage repair.
Financial Discipline and Strong Balance Sheet
Year-end cash and cash equivalents increased to $586 million, an improvement of $120 million from the previous year. Inventory declined by $20.7 million, showing effective working capital management.
Lowlights
Decline in Overall Sales and EBITDA
Net sales were $422.7 million, representing a decline of 7.8% from 2023. Adjusted EBITDA was $129.7 million, with an adjusted EBITDA margin of 30.7%, both below 2023 levels.
International Market Challenges
Faced headwinds internationally as the company focused on resetting business for the future, impacting sales performance negatively.
Professional Channel Sales Decline
Professional channel sales declined by 27.1% year over year, with a greater impact from focusing on partnering with fewer but stronger international distributors.
Delayed Impact of Marketing Investments
The investment in marketing took longer than expected to improve demand across SKUs, impacting sales performance.
Company Guidance
During the Olaplex Holdings, Inc. Fourth Quarter 2024 earnings call, the company provided guidance for fiscal 2025, indicating an expected net sales range between a 3% decline and a 2% increase compared to 2024. The adjusted gross margin is anticipated to remain strong, ranging from 70.5% to 71.5%, while the adjusted EBITDA margin is projected to be between 20% and 22%. The company emphasized its three strategic priorities for the year: generating brand demand, harnessing innovation, and executing with excellence. These priorities are expected to support the company's transformation and position it for long-term profitable growth. Additionally, Olaplex plans to continue investing in talent and marketing, particularly in the U.S. market, to reinforce its brand positioning as a leader in foundational hair health and beauty.Olaplex Holdings Corporate Events
Executive/Board Changes
Olaplex Holdings Appoints Pamela Edwards as Director
Positive
Mar 20, 2025
On March 18, 2025, Olaplex Holdings, Inc. appointed Pamela Edwards as a Class II director and a member of the Audit Committee, effective March 19, 2025. Ms. Edwards brings extensive experience in finance and operations leadership from her previous roles at Citi Trends, L Brands, and other major retail companies, potentially strengthening Olaplex’s strategic and financial oversight.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.