Canaccord Genuity lowers Olaplex stock price target to $1.50 on margin pressure

Published 08/08/2025, 12:36
Canaccord Genuity lowers Olaplex stock price target to $1.50 on margin pressure

Investing.com - Canaccord Genuity lowered its price target on Olaplex Inc (NASDAQ:OLPX) to $1.50 from $2.00 on Thursday, while maintaining a Hold rating on the hair care company’s stock. The stock currently trades at $1.43, and according to InvestingPro analysis, appears undervalued based on its Fair Value calculation.

The price target reduction follows Olaplex’s second-quarter 2025 results released Wednesday, which showed sales increasing 2.3% year-over-year to $106.3 million, marking the company’s first positive sales growth in nine quarters. The results exceeded both Canaccord’s and Wall Street’s expectations, which had projected sales declines of 2.3% and 3.5%, respectively. InvestingPro data reveals impressive gross profit margins of 70.79% and strong liquidity, with current assets significantly exceeding short-term obligations.

Olaplex also reported adjusted EBITDA margins of 23.1% for the quarter, surpassing analyst estimates of 20.6% to 20.9%. Management highlighted progress on their three-part strategy focused on generating brand demand, harnessing innovation, and executing with excellence. The company’s stock has shown significant momentum, gaining over 9% in the past week. InvestingPro subscribers have access to 12 additional investment tips and comprehensive analysis for OLPX, including detailed financial health scores and growth projections.

The company is undergoing a transformation that includes modernizing its brand image, resetting its international distributor business, renewing focus on product education, and increasing digital investments. Despite these positive developments, Canaccord cited potential near-term margin pressure as management increases investments.

Canaccord acknowledged the encouraging early signs in Olaplex’s turnaround but noted that volatility may continue as changes are implemented amid persistent macroeconomic challenges and timing uncertainties for second-half shipments.

In other recent news, Olaplex Holdings Inc. announced its second-quarter 2025 financial results, revealing a mixed performance. The company reported an earnings per share (EPS) of -$0.0048, which did not meet the forecasted $0.0128, resulting in a negative surprise of 137.5%. However, Olaplex’s revenue figures were more promising, reaching $106.3 million and surpassing the expected $100.64 million by 5.6%. These results indicate a positive revenue trend despite the EPS shortfall. The financial report highlights the company’s ability to generate higher-than-expected sales, which may be a point of interest for investors. The latest developments reflect the ongoing challenges and opportunities faced by Olaplex in the current market environment.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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