Should you buy Oddity Technology stock? (May 2024)

Oddity Technology stock analysis. Ticker: $ODD

Israeli company Oddity Technology is responsible for two fast growing beauty brands Il Makiage and SpoiledChild. In the company’s annual report, Oddity says it uses data science, machine learning, and computer vision to deliver science-based beauty products.

And it seems to be working. Oddity’s revenues have grown from $111 million in 2020 to $555 million over the last 12 months, taking the company’s market value past 2.6 billion dollars.

The business is also nicely profitable with net income of 72 million and just over 100 million of free cash flow. So at 22 times free cash flow the stock doesn’t look too expensive.

However, not everyone is bullish on Oddity stock as witnessed by a short interest of 22%. And there are a couple of reasons why.

The first is that beauty products have a reputation for turning into fads. Popular hair company Olaplex which went public in 2021 at a valuation of nearly $14 billion is a good example. Less than 3 years later, Olaplex stock is down 90% with sales plunging 35% last year. With the exception of ELF it’s usually safer to bet on the more established brands.

The second concern relates to management. A quick trip to Oddity’s website provides an unusual experience. Instead of photos of models and makeup we get a slew of buzz words such as artificial intelligence, data science and machine learning. It’s clear that Oddity is not a beauty company but a tech firm that uses data to develop and promote new products.

And there’s no doubt that Oddity takes an aggressive approach. Customers complain about too many ads on social media and overpriced products. Others say that they got stuck into auto renewals without realizing. Clearly not everyone is a fan of the company. In addition, an investigation by The Bear Cave found some red flags about management with ties to other poor performing businesses like The Honest Company and Better Mortgage.

#investing #stocks #oddity #3mb

[mrh]

Thank you for your input and breakdown on ODD 👊🏻

[montyloads]

Would like it if you could do a video on McDonald's after the recent drops in share prices

[batranelwadie]

Can you do ACM Research and Skywater technology