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ODDITY Tech Ltd. (NASDAQ:ODD), a rising star in the direct-to-consumer beauty and personal care industry with a market capitalization of $3.47 billion, has been making waves with its innovative approach to product development and marketing. The company, known for its flagship brands IL MAKIAGE and SpoiledChild, has demonstrated strong growth potential with impressive revenue growth of 26% in the last twelve months, while navigating the challenges of expanding its product portfolio and international presence. According to InvestingPro, the company maintains excellent gross profit margins of 73%, positioning it well in the competitive beauty space.
Financial Performance and Growth Strategy
ODDITY has consistently delivered impressive revenue growth, with analysts projecting a continuation of 20%+ year-over-year increases. The company’s success is largely attributed to its unique direct-to-consumer business model, which has resulted in high repeat customer rates exceeding 100%. This strong customer loyalty has been a key driver of profitability and sustained growth, reflected in the company’s robust return on equity of 30%. InvestingPro analysis reveals 14+ additional insights about ODDITY’s financial health and growth prospects, available to subscribers.
International expansion has emerged as a significant growth lever for ODDITY. The company has seen particularly strong performance in established markets, while newer markets such as France, Italy, and Spain have shown potential to match the size of the U.S. market. In the first half of 2025, international sales grew by over 40% year-over-year, indicating the company’s ability to successfully penetrate new geographies.
ODDITY’s growth strategy revolves around aggressive marketing campaigns, particularly on social media platforms. The company has significantly ramped up its marketing investments, especially for its IL MAKIAGE and SpoiledChild brands. This increased spending is expected to support the projected 20%+ revenue growth, although it may lead to some near-term pressure on EBITDA margins.
Product Portfolio and Innovation
At the core of ODDITY’s success are its two established brands, IL MAKIAGE and SpoiledChild. IL MAKIAGE, the company’s flagship brand, has demonstrated remarkable growth and is on track to reach $1 billion in revenue by 2028. SpoiledChild, a more recent addition to the portfolio, is expected to achieve $200 million in revenue by 2025.
ODDITY is not resting on its laurels, however. The company is preparing to launch two new brands that are expected to serve as significant growth catalysts. Brand 3, set to launch in the dermatology space with plans to expand into body care, is scheduled for a soft launch in the third quarter of 2025, followed by an official launch in the fourth quarter. Brand 4 is slated for launch in early 2026. These new brands are anticipated to accelerate revenue growth as they begin to contribute meaningfully to the company’s top line.
Innovation is a key focus for ODDITY, with ODDITY Labs serving as the company’s research and development arm. The lab is working on developing new molecules and scientifically differentiated products, which could provide a competitive edge in the crowded beauty and personal care market. Analysts are particularly excited about the potential for ODDITY Labs to drive long-term innovation and create additional revenue streams.
Market Position and Competitive Landscape
ODDITY’s direct-to-consumer model sets it apart from traditional beauty companies. This approach allows the company to maintain a close relationship with its customers, gather valuable data, and quickly adapt to changing consumer preferences. The high repeat customer rates suggest that ODDITY has successfully built brand loyalty, a crucial factor in the competitive beauty industry. InvestingPro’s comprehensive analysis shows the company maintains a strong financial health score of 3.35 (rated as "GREAT"), with liquid assets significantly exceeding short-term obligations as evidenced by a current ratio of 6.32.
The company’s focus on data-driven product development and marketing has also contributed to its strong market position. By leveraging customer insights, ODDITY can create products that closely align with consumer needs and preferences, potentially giving it an edge over competitors.
Risks and Challenges
Despite its strong growth trajectory, ODDITY faces several challenges. The company’s aggressive investment in new brand launches and international expansion is putting pressure on EBITDA margins in the near term. While management expects these investments to pay off in the long run, there is always a risk that new brands may not achieve the desired product-market fit or that international expansion may not yield the expected returns.
Additionally, the beauty and personal care industry is highly competitive, with both established players and new entrants vying for market share. ODDITY will need to continue innovating and effectively marketing its products to maintain its growth momentum.
Future Outlook
Looking ahead, ODDITY has reiterated its revenue growth algorithm of 20%+ for 2026, driven by its existing brands and upcoming launches. The company also maintains an EBITDA margin target of 20%+ for 2026, despite expecting some margin pressures due to upfront investments in new brand launches. Based on InvestingPro’s Fair Value analysis, the stock appears slightly overvalued at current levels, trading at a P/E ratio of 41.2x and showing relatively high price volatility with a beta of 3.27. For a deeper understanding of ODDITY’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Analysts are generally optimistic about ODDITY’s prospects, with many viewing the company’s premium brand portfolio, growth pipeline, and opportunities presented by ODDITY Labs as justification for bullish projections.
Bear Case
Will increased investments in new brands and international expansion significantly impact near-term profitability?
ODDITY’s aggressive investment strategy, while potentially beneficial for long-term growth, could put pressure on short-term profitability. The company’s EBITDA margins are expected to dip slightly in the near term due to increased spending on marketing and new brand development. There is a risk that these investments may not yield the expected returns as quickly as anticipated, which could disappoint investors looking for immediate profitability improvements.
Can ODDITY maintain its high growth rate as it expands into new international markets?
While international expansion has been a key driver of ODDITY’s recent growth, there are challenges associated with entering new markets. Different consumer preferences, regulatory environments, and competitive landscapes in various countries could make it difficult for ODDITY to replicate its U.S. success. The company may need to adapt its strategies and products for each market, which could slow growth or increase costs.
Bull Case
How will the launch of Brand 3 and Brand 4 accelerate ODDITY’s revenue growth?
The upcoming launches of Brand 3 and Brand 4 represent significant growth opportunities for ODDITY. These new brands are expected to tap into different segments of the beauty and personal care market, potentially attracting new customer demographics. If successful, these launches could substantially increase ODDITY’s total addressable market and drive accelerated revenue growth. The company’s track record with IL MAKIAGE and SpoiledChild suggests it has the capability to create and scale successful brands.
What potential does ODDITY Labs have for driving long-term innovation and creating competitive advantages?
ODDITY Labs represents a unique asset that could provide the company with a sustainable competitive advantage. By developing proprietary molecules and scientifically differentiated products, ODDITY could create offerings that are difficult for competitors to replicate. This innovation pipeline could lead to higher-margin products, increased customer loyalty, and potentially even licensing opportunities. The success of ODDITY Labs could position the company as a leader in beauty tech, attracting both consumers and investors interested in cutting-edge beauty solutions.
SWOT Analysis
Strengths:
- Strong direct-to-consumer business model
- High repeat customer rates exceeding 100%
- Successful existing brands (IL MAKIAGE, SpoiledChild)
- Data-driven approach to product development and marketing
Weaknesses:
- Margin pressures due to investments in growth initiatives
- Dependence on successful launches of new brands
Opportunities:
- International expansion into new markets
- Launch of Brand 3 and Brand 4
- Potential innovations from ODDITY Labs
- Growing market for personalized beauty products
Threats:
- Intense competition in the beauty and personal care markets
- Potential economic downturns affecting consumer discretionary spending
- Regulatory challenges in different international markets
- Rapidly changing consumer preferences in the beauty industry
Analysts Targets
- Barclays: $64 (September 4th, 2025)
- JMP Securities: $80 (August 6th, 2025)
- Barclays: $60 (May 1st, 2025)
- JMP Securities: $72 (May 14th, 2025)
- Barclays: $42 (April 30th, 2025)
- JMP Securities: $66 (April 22nd, 2025)
- Barclays: $46 (February 27th, 2025)
- Barclays: $42 (February 26th, 2025)
ODDITY Tech Ltd. stands at a crucial juncture in its growth journey. With its innovative approach to beauty and personal care, strong direct-to-consumer model, and ambitious expansion plans, the company has positioned itself for potential long-term success. However, investors should carefully consider the risks associated with increased investments and the challenges of maintaining high growth rates in a competitive industry. As ODDITY continues to evolve, its ability to successfully launch new brands and leverage its technological innovations will likely determine its future in the dynamic beauty market.
This analysis is based on information available up to September 18, 2025.
InvestingPro: Smarter Decisions, Better Returns
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