On Tuesday, Oddity Tech Ltd (NASDAQ:ODD) maintained its Overweight rating and $50.00 price target from KeyBanc after the company beat its quarterly results for the fourth consecutive quarter. The positive performance was driven by an increase in orders and an increase in average order value (AOV) of about 6% year over year. Oddity Tech also slightly raised its 2024 forecast.

The company is seeing a growing share of repeat customers in sales, indicating a strengthening of the customer base. The expected higher share of repeat customers in sales in FY24 compared to FY23 is seen as a positive sign. Oddity Tech’s IL MAKIAGE and SpoiledChild brands both saw double-digit growth during the quarter. In addition, the company’s increase in sales was partly due to the successful launch of a new skin care product line under IL MAKIAGE.

In a strategic move to strengthen its scientific capabilities, Oddity Tech announced the appointment of Dr. Ido Bachelet as Chief Science Officer to lead ODDITY LABS. Dr. Bachelet’s expertise in scaling biotech labs is expected to significantly enhance the Company’s molecule creation platform.

KeyBanc’s analysis suggests that Oddity Tech is still in the early stages of its growth curve and could benefit from a disruption in the beauty and wellness markets in the near term. The company also sees long-term growth prospects due to Oddity Tech’s unique technology and biotech resources. The expansion of ODDITY LABS’s molecule discovery platform is expected to not only increase sales of existing brands but also improve the go-to-market prospects for the company’s third and fourth brands, which will leverage these biotech resources.

Oddity Tech’s current valuation is considered attractive by KeyBanc at approximately 13.5x next twelve month (NTM) adjusted EBITDA, slightly above the peer group average of approximately 13.0x, despite Oddity Tech’s forecasted above-average revenue growth of over 20% and margins of over 20% for the coming years.

In other recent news, Oddity Tech reported a record-breaking second quarter for fiscal 2024 with a significant increase in revenue and profitability. The company’s revenue increased 28% to $404 million, while adjusted EBITDA and free cash flow increased to $110 million and $104 million, respectively. This robust financial performance was driven by strategic investments in technology that strengthened the company’s scalability and profitability.

In addition, Oddity Tech has announced the development of ODDITY LABS and the expected launch of Brand 3 and Brand 4. Existing brands IL MAKIAGE and SpoiledChild have also shown strong performance, contributing to a 27% increase in net revenue to $193 million. Looking ahead, the company has raised its full-year 2024 guidance and expects net revenue to be between $633 million and $640 million.

Despite the upfront costs and potential challenges from tariffs and duties, Oddity Tech remains optimistic about its growth prospects. The company plans to maintain a 20% growth rate and is well positioned to overcome supply chain and tariff challenges. These recent developments demonstrate that Oddity Tech is committed to innovation and delivering on its promises to shareholders.

InvestingPro Insights

As Oddity Tech Ltd (NASDAQ:ODD) continues to beat expectations with its earnings and growth trajectory, recent data from InvestingPro provides further insight into the company’s financial health and market position. With an adjusted market capitalization of $2.16 billion, Oddity Tech stands out in the market. The company’s forward-looking P/E ratio, currently at 25.48, is expected to adjust to a more favorable 21.67 in the near future. This adjustment reflects the company’s expected earnings growth and potentially makes its stock more attractive to value investors.

InvestingPro’s data also highlights Oddity Tech’s impressive gross profit margin, which stood at nearly 72% over the last twelve months (as of Q2 2024). This profitability underscores the company’s efficiency and the premium nature of its product lines. In addition, the company’s revenue growth has been robust, with a notable increase of 31.47% over the last twelve months (as of Q2 2024), which is consistent with the positive revenue trends mentioned in KeyBanc’s analysis.

Two InvestingPro tips that are particularly relevant for Oddity Tech investors are the company’s impressive gross profit margins and the prediction that the company will be profitable this year. These insights suggest that Oddity Tech is not only growing its revenue but also managing to convert revenue into meaningful profits. For those who want to dive deeper, InvestingPro offers additional tips on Oddity Tech’s financials and market performance, providing a comprehensive tool for investors to make informed decisions.

Overall, InvestingPro’s data and tips contribute to a positive outlook for Oddity Tech and support the Overweight rating and $50.00 price target set by KeyBanc. Investors can find more valuable insights and tips on Oddity Tech by visiting InvestingPro, which has a total of 11 additional tips for the company.

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