Olaplex Holdings (OLPX – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Dara Mohsenian from Morgan Stanley maintained a Hold rating on the stock and has a $1.90 price target.
Dara Mohsenian’s rating is based on a combination of factors, including Olaplex Holdings’ recent financial performance and future outlook. The company’s Q4 results surpassed expectations, with significant improvements in revenue, gross profit, and adjusted EBITDA, driven by increased consumer demand and effective marketing strategies. However, despite these positive developments, there remains uncertainty about the company’s ability to sustain topline growth in the future.
Mohsenian notes that while Olaplex’s initial FY25 revenue guidance is promising, the anticipated increase in marketing expenses has led to a reduction in EBITDA forecasts. This, coupled with mixed performance across different sales channels, such as a decline in the professional channel and a slight decrease in direct-to-consumer sales, contributes to the Hold rating. The lack of visibility into long-term growth prospects and the need for continued turnaround efforts are key reasons for maintaining a cautious outlook.
Mohsenian covers the Consumer Defensive sector, focusing on stocks such as Colgate-Palmolive, Coca-Cola, and PepsiCo. According to TipRanks, Mohsenian has an average return of 7.6% and a 64.81% success rate on recommended stocks.
In another report released yesterday, Piper Sandler also maintained a Hold rating on the stock with a $1.50 price target.