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Investing.com - Raymond James has reiterated its Market Perform rating on Olaplex Inc (NASDAQ:OLPX), currently trading at $1.45, following the company’s acquisition announcement. According to InvestingPro analysis, the company appears undervalued based on its Fair Value assessment.
Olaplex announced Tuesday the acquisition of Purvala, a biotech company with applications focused on health and beauty, for $10.5 million. The deal comes as Olaplex maintains impressive gross profit margins of 71% and strong liquidity, with current assets well exceeding short-term obligations.
The two companies already have an established relationship, with Purvala having transferred three of its patents on hair strengthening and shaping to Olaplex in 2023. Additionally, Lavinia Popescu, Olaplex’s chief science and research officer, previously worked for one of Purvala’s founders.
This marks Olaplex’s first acquisition since its 2021 IPO, representing what Raymond James views as "a logical step to improving innovation and R&D" as the company looks to expand its category footprint.
The acquisition aligns with Olaplex’s "Bonds and Beyond" strategy, which focuses on expanding the company’s product offerings and market presence.
In other recent news, Olaplex Holdings reported its second-quarter 2025 earnings, revealing a miss on earnings per share (EPS) expectations but a beat on revenue forecasts. The company posted an EPS of -$0.0048, falling short of the forecasted $0.0128, while revenue reached $106.3 million, surpassing the anticipated $100.64 million by 5.6%. This marks the company’s first positive sales growth in nine quarters, with sales increasing 2.3% year-over-year, exceeding both Canaccord Genuity’s and Wall Street’s expectations. In a strategic move, Olaplex acquired Boston-based biotech firm Purvala Bioscience, marking its first acquisition since the company’s launch over ten years ago. Additionally, Canaccord Genuity upgraded Olaplex’s stock from Hold to Buy, raising its price target to $2.00 from $1.50, citing brand reinvigoration and potential return to growth. The upgrade follows a previous reduction of the price target to $1.50 due to margin pressure. Canaccord Genuity’s Susan Anderson is now the only bullish voice among approximately nine firms covering Olaplex, highlighting a potential turning point for the brand. These developments indicate a cautiously optimistic outlook for Olaplex among some analysts.
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