Olaplex Holdings: Strong Buy Rating Backed by Brand Revitalization and Attractive Valuation

In a report released today, Susan Anderson from Canaccord Genuity upgraded Olaplex Holdings to a Buy, with a price target of $2.00.

Susan Anderson has given her Buy rating due to a combination of factors that highlight Olaplex Holdings’ potential for growth and market positioning. The company has experienced a revitalization of its brand, which is now poised to leverage its prestige status in the beauty industry for renewed growth. After a period of fluctuating sales, Olaplex is seeing stabilization in both sales and margins, with recent quarters showing positive growth for the first time in several quarters. This stability is supported by strategic investments in marketing, merchandising, and innovation, which are beginning to yield results.
Furthermore, Olaplex is trading at a valuation that is attractive compared to its peers, with a lower EBITDA multiple despite having normalized its margins to industry standards. The prestige hair category, in which Olaplex operates, continues to show robust growth, providing a solid foundation for the company’s future expansion. The management’s efforts in brand refresh and inventory management have also been positively received, indicating strong execution capabilities. These factors collectively contribute to the compelling risk/reward profile that underpins Anderson’s Buy rating for Olaplex Holdings.

Based on the recent corporate insider activity of 25 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of OLPX in relation to earlier this year.