1 Odd Stock Set To Skyrocket?

Oddity Technology, a company at the intersection of consumer artificial intelligence, beauty, wellness, and now, even biotechnology, has largely flown under the radar but perhaps not for much longer. That’s because, unlike many AI stocks, Oddity isn’t growing like a weed at the expense of hefty losses.

Instead it’s reported soaring revenues and turning the bottom line positive in the process. Plus it’s got a rock solid balance sheet, which means this AI stock deserves a closer look.

Key Points

• Oddity Technology boasts strong financials with revenues expected to rise from $479 million this year to $688 million in two years. Despite the strong performance, the stock is down 37% year-to-date.
• The company’s impressive financial metrics include an ever-strengthening balance sheet with $66.5 million in cash and $40.2 million in short-term investments, offset by only $13 million in debt. 
• Wall Street analysts are bullish on Oddity, with seven analysts covering the stock placing a consensus price target of $58 per share. 

Forecasts Are Strongly Bullish

Analysts are forecasting revenues will rise from $479 million this year to $574 million next year and $688 million the following year. These promising estimates also come with an improved gross margin and operating margin. For investors, this should translate to better returns on investment yet the share price is down 37% year to-date.

So what could turn the share price around?

The critical question that looms large is whether Oddity can sustain its rapid growth, especially as it scales. With the stock price still below its IPO price, investor skepticism is palpable but the company’s aggressive approach towards both core and new business segments, such as healthcare, indicates a well-calibrated plan for scalable growth.

Oddity has primarily targeted the global beauty and wellness markets through its Il Makiage and SpoiledChild brands but what sets it apart is its foray into biotechnology with the acquisition of Revela in April 2023.

The company is not just diversifying its portfolio but is also accelerating its molecule discovery platform through the Oddity Labs segment that could provide ingredients to the beauty and wellness markets.

And analysts are upbeat about the firm’s prospects with 7 of them covering the stock and placing a consensus price target of $58 per share on it.

Oddity Financials Are Impressive

It’s no surprise that Wall Street is bullish on the firm’s prospects. Revenues were up 54.9% last quarter and 83.2% the quarter prior on a year-over-year basis.

Better still, the company is not growing while burning its cash pile. Operating income was positive to the tune of $36.8 million in the most recent quarter and $32.5 million in the quarter prior.

The P&L figures are translating to an ever-strengthening balance sheet featuring $66.5 million in cash and $40.2 million in short-term investments. That’s offset by just $13 million in debt, a very manageable burden.

With a market cap of $1.59B and a P/E multiple of 32.5x, Oddity seems quite reasonably priced given its stellar growth. Indeed, it’s trading at just 3.7x its last twelve months sales.

The bottom line is Oddity Technology’s robust financials make it a compelling case for investment. While investor skepticism remains, the company’s data-rich history and forward-looking strategy offer sufficient reasons to place the stock on your watchlist.