Olaplex stock price target cut to $1.40 by Jefferies

On Tuesday, Olaplex Inc (NASDAQ:OLPX) experienced a revision in its stock price target from Jefferies, with the firm reducing the figure to $1.40 from the previous target of $1.75. Despite this change, Jefferies maintained a Hold rating on the company’s shares. Currently trading at $1.68, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $1.50 to $4.00. The adjustment came after Olaplex reported its fourth-quarter results, which showed sales and EBITDA surpassing estimates.

The future outlook for fiscal year 2025 presented by the company was mixed when compared to Wall Street expectations. Although sales forecasts exceeded projections, gross margin percentage and EBITDA margin percentage fell short. The management team at Olaplex has been recognized for their disciplined approach and dedication to innovation as they work towards fostering long-term sustainable growth for the brand.

Jefferies noted that Olaplex is beginning to see the positive effects of its strategic initiatives. The company’s efforts to strengthen its brand and introduce new products are gaining traction. This disciplined focus is a promising sign for the company’s future, although Jefferies has decided to remain on the sidelines for now.

The revised price target reflects Jefferies’ updated fiscal year 2025 estimates, which have been aligned with the guidance provided by Olaplex. The adjustment to the price target to $1.40 is based on the latest financial data and the company’s strategic direction as observed by the analysts at Jefferies.

In their report, Jefferies expressed a cautious optimism about Olaplex’s management team, acknowledging their commitment to strategic initiatives aimed at building the brand. The analysts adjusted their estimates to align with the company’s guidance, resulting in the new price target.

In other recent news, Olaplex Holdings Inc. reported its Q4 2024 earnings, meeting Wall Street expectations with an earnings per share (EPS) of $0.01. The company exceeded revenue forecasts with $100.7 million, surpassing the anticipated $87.51 million. Despite a year-over-year decline in net sales, both for the quarter and the full year, Olaplex’s strong performance in revenue highlights its resilience in a challenging market environment. The company also reported a robust cash position, with cash and equivalents rising to $586 million.

In another development, Piper Sandler adjusted its outlook on Olaplex, reducing the price target from $2.00 to $1.50 while maintaining a Neutral rating. The firm expressed cautious optimism about Olaplex’s long-term potential, noting the company’s strategic investments in team expansion, research and development, and marketing. Piper Sandler highlighted that these investments have led to a realignment of margins to more typical levels within the beauty industry.

Olaplex’s strategic focus on innovation and new product launches is evident, as the company plans to introduce 2-3 new products annually. The firm is also concentrating on strengthening its presence in the U.S. market, aiming to capitalize on the projected growth in the premium hair care market. As Olaplex continues its transformation, the company remains committed to its strategic priorities, including maximizing sales impact and developing a long-term roadmap.

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