ODDITY Tech Ltd. Class A (ODD) AI Stock Analysis

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ODDITY Tech Ltd. Class A

(NASDAQ:ODD)

80Outperform

ODDITY Tech Ltd. is well-positioned for growth with strong financial performance, robust earnings call outcomes, and a stable technical outlook. The company's focus on innovation and expansion underpins its growth prospects, though its relatively high valuation may deter some investors. Overall, the stock reflects a solid investment opportunity with balanced risk and reward potential.

Positive Factors

Brand Growth

Il Makiage surpassed $500mn in sales in 2024, indicating a 25% year-over-year growth.

Competitive Advantage

ODD's strong and profitable growth profile is seen as a differentiator versus legacy peers due to its enhanced technological capabilities.

Earnings

ODD reported a strong finish to FY24, delivering sales growth, adj. EBITDA, and EPS well ahead of guidance that had been consistently raised each quarter this past year.

Negative Factors

Investment Impact

Management plans significant investments behind new brands and towards Oddity Labs in 2025, which it expects will drive margin contraction.

Margin Contraction

Gross margin is expected to contract by over 200 basis points to 70% as the product mix normalizes and Brand 3 launches, which has a lower gross margin.

ODDITY Tech Ltd. Class A (ODD) vs. S&P 500 (SPY)

Market Cap

$2.18B

Dividend YieldN/A

Average Volume (3M)516.35K

Price to Earnings (P/E)23.2

Beta (1Y)2.04

Revenue Growth27.20%

EPS Growth70.25%

CountryUS

Employees489

SectorTechnology

Sector Strength40

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)1.63

Shares Outstanding44,281,292

10 Day Avg. Volume547,042

30 Day Avg. Volume516,353

Financial Highlights & Ratios

PEG Ratio0.33

Price to Book (P/B)N/A

Price to Sales (P/S)3.74

Price to Cash Flow (P/CF)82.20

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$53.50

Price Target Upside37.11% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

ODDITY Tech Ltd. Class A Business Overview & Revenue Model

Company DescriptionODDITY Tech Ltd. Class A (ODD) is a technology-driven company specializing in the beauty and wellness sector. The company leverages advanced data science techniques and AI-driven platforms to provide personalized beauty and wellness products directly to consumers. ODDITY Tech aims to revolutionize the consumer experience by integrating technology with beauty, offering a range of products and services that cater to individual preferences and needs.

How the Company Makes MoneyODDITY Tech Ltd. makes money primarily through direct-to-consumer sales of its beauty and wellness products. The company utilizes its proprietary AI and data analytics platforms to create personalized beauty solutions, which are marketed and sold through its online channels. Key revenue streams include sales of skincare, cosmetics, and wellness products. Furthermore, the company may engage in strategic partnerships with other technology and beauty firms to enhance its product offering and reach a wider audience. These partnerships, along with the company's focus on innovation and customer engagement, contribute significantly to its earnings.

ODDITY Tech Ltd. Class A Financial Statement Overview

Summary

ODDITY Tech Ltd. exhibits strong financial health with impressive revenue growth and profitability margins. The company has a solid equity ratio and low leverage, indicating stability and low financial risk. Efficient cash flow management further supports its robust liquidity position, although there is room for improvement in operational efficiency and return on equity.

Income Statement

Very Positive

ODDITY Tech Ltd. has demonstrated strong revenue growth, with a 27.2% increase from 2023 to 2024. Gross profit margin stands at an impressive 72.4%, indicating strong pricing power and cost management. The net profit margin of 15.7% showcases profitability, although there's room for improvement in operational efficiency as evidenced by a 17.9% EBIT margin. Overall, the income statement reflects robust financial health with significant growth potential.

Balance Sheet

Positive

The company maintains a solid equity ratio of 64.3%, indicating a strong financial position. The debt-to-equity ratio is low at 0.08, suggesting minimal leverage and financial risk. However, return on equity is moderate at 35.9%, indicating efficient use of shareholders' funds but with potential for enhancement. Overall, the balance sheet reflects stability with a conservative financial structure.

Cash Flow

Very Positive

ODDITY Tech Ltd. shows strong cash flow performance with a free cash flow growth rate of 58.6% from 2023 to 2024. The operating cash flow to net income ratio is 1.36, indicating healthy cash generation relative to earnings. Free cash flow to net income ratio is 1.28, demonstrating efficient cash utilization. Cash flow metrics suggest robust liquidity and the capacity to support growth initiatives.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
647.04M	508.69M	324.52M	222.56M	110.64M
	Gross Profit
468.32M	358.23M	218.05M	153.18M	77.83M
	EBIT
115.60M	74.32M	27.66M	19.51M	16.66M
	EBITDA
125.43M	82.92M	32.07M	23.52M	20.92M
	Net Income Common Stockholders
101.49M	58.53M	21.73M	13.92M	11.71M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
100.22M	115.65M	40.95M	28.83M	39.77M
	Total Assets
438.88M	404.91M	216.41M	142.97M	81.75M
	Total Debt
22.71M	12.51M	15.88M	5.35M	5.49M
	Net Debt
-27.63M	-24.02M	-25.07M	-23.48M	-34.27M
	Total Liabilities
156.58M	121.80M	117.70M	74.32M	29.40M
	Stockholders Equity
282.30M	283.11M	98.70M	68.65M	52.35M
Cash Flow		Free Cash Flow
129.76M	81.84M	31.25M	3.12M	19.75M
	Operating Cash Flow
137.76M	87.45M	39.03M	9.87M	23.02M
	Investing Cash Flow
1.35M	-139.99M	-25.78M	-18.78M	6.67M
	Financing Cash Flow
-127.30M	48.81M	-246.00K	-318.00K	161.00K

ODDITY Tech Ltd. Class A Technical Analysis

Technical Analysis Sentiment

Negative

Last Price39.02

Price Trends

50DMA

44.31

Negative

100DMA

44.53

Negative

200DMA

41.84

Negative

Market Momentum

MACD

-0.35

Positive

RSI

46.06

Neutral

STOCH

37.88

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ODD, the sentiment is Negative. The current price of 39.02 is below the 20-day moving average (MA) of 43.52, below the 50-day MA of 44.31, and below the 200-day MA of 41.84, indicating a bearish trend. The MACD of -0.35 indicates Positive momentum. The RSI at 46.06 is Neutral, neither overbought nor oversold. The STOCH value of 37.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ODD.

ODDITY Tech Ltd. Class A Risk Analysis

ODDITY Tech Ltd. Class A disclosed 95 risk factors in its most recent earnings report. ODDITY Tech Ltd. Class A 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

ODDITY Tech Ltd. Class A Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ODD	80 Outperform	$2.18B	23.17	35.90%	―	27.20%	70.25%
KSPI	79 Outperform	$16.02B	7.14	83.96%	8.72%	28.55%	19.93%
TOST	73 Outperform	$17.65B	―	1.46%	―	28.33%	―
KVYO	71 Outperform	$7.22B	―	-4.74%	―	34.29%	86.52%
CFLT	64 Neutral	$6.81B	―	-38.95%	―	24.03%	27.45%
S	64 Neutral	$5.57B	―	-17.68%	―	32.25%	20.56%
Sector *	57 Neutral	$18.45B	9.41	-13.97%	2.74%	5.04%	-23.56%

* Technology Sector Average

Performance Comparison

ODD

ODDITY Tech Ltd. Class A

37.87

1.16

3.16%

CFLT

Confluent

19.68

-9.92

-33.51%

SentinelOne

16.28

-5.87

-26.50%

TOST

Toast Inc

30.03

7.05

30.68%

KVYO

Klaviyo, Inc. Class A

26.02

2.42

10.25%

KSPI

Kaspi.kz JSC Sponsored ADR RegS

81.23

-27.87

-25.55%

ODDITY Tech Ltd. Class A Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: -14.28% | Next Earnings Date: May 13, 2025

Earnings Call Sentiment Positive

The earnings call reflects a very strong financial performance with significant revenue and EBITDA growth, robust free cash flow, and successful brand expansions. While there are challenges such as adjusted EBITDA margin compression due to growth investments and lower gross margins for new brands, the overall outlook remains optimistic with continued innovation and international expansion. The company's ability to exceed guidance consistently, coupled with strong customer repeat rates and strategic investments, underscores a positive trajectory.

Highlights

Record Revenue Growth

Oddity Tech Ltd. reported a revenue increase of 27% year-over-year, reaching $647 million for fiscal year 2024.

Impressive Adjusted EBITDA Growth

The adjusted EBITDA grew by 40% year-over-year to $150 million at a 23.3% margin.

Strong Free Cash Flow

The company generated $134 million in free cash flow, converting over 130% of net income into cash.

Consistent Outperformance

Oddity Tech Ltd. exceeded earnings guidance every quarter since going public and raised outlooks on sales and profitability for seven consecutive quarters.

Successful Brand Performance

Il Makiage and Spoiled Child both grew revenue by double digits, with Il Makiage surpassing $500 million in revenue.

High Customer Repeat Rate

The company achieved a twelve-month revenue repeat rate of over 100%.

Strong International Expansion

Initiatives to accelerate international presence are underway with good indications from markets like the UK, Germany, and Australia.

Innovative Product Pipeline

New brands like Brand 3 and Brand 4, and initiatives like Oddity Labs, highlight potential future growth and innovation.

Robust AI and Tech Development

Significant advancements in AI-based commercial engines and product personalization were reported, boosting customer experience and operational efficiency.

Strategic Share Buybacks

Repurchased 3.6 million shares, totaling approximately $147 million, indicating strong cash flow and shareholder value creation.

Lowlights

Adjusted EBITDA Margin Compression

Adjusted EBITDA margin decreased by 453 basis points due to planned incremental expenses for new growth initiatives.

Lower Gross Margin for New Brands

Anticipated lower gross margin for Brand 3 due to higher costs associated with prescription offerings and telehealth infrastructure.

Increased Marketing Costs

Higher marketing expenses noted, especially in Q1, though mitigated by strong repeat business.

Company Guidance

In the earnings call for Oddity Tech Ltd.'s Fourth Quarter and Full Year 2024, the company reported strong financial performance and optimistic guidance for 2025. Oddity Tech achieved a 27% revenue growth to $647 million and delivered an adjusted EBITDA of $150 million at a 23.3% margin. The company also reported $134 million in free cash flow, converting over 130% of net income into cash. Both Il Makiage and Spoiled Child, Oddity's brands, experienced double-digit revenue growth, with Il Makiage surpassing $500 million in revenue. The repeat sales rate was a key focus, with a twelve-month revenue repeat rate exceeding 100%, indicating high customer satisfaction. The company is bullish on 2025, setting a target for 20% revenue growth and a 20% adjusted EBITDA margin. Oddity Tech is expanding its international presence and investing significantly in new brands and technologies, including a telehealth platform and the biotech lab Oddity Labs, to drive future growth. The call also highlighted the successful online shift and the direct-to-consumer model's advantages in maintaining strong margins and managing inventory effectively.

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.