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Investing.com -- Olaplex Holdings (NASDAQ:OLPX) stock surged 12% Monday after receiving its first buy rating from Wall Street analysts, marking a potential turning point for the prestige beauty brand.
Canaccord Genuity analyst Susan Anderson upgraded Olaplex from Hold to Buy and raised her price target to $2.00 from $1.50, representing a 43% upside from Friday’s closing price of $1.40. This makes Anderson the sole bullish voice among approximately nine firms covering the stock.
In her upgrade note, Anderson cited a "brand reinvigoration" at Olaplex, suggesting the company is "ready to shine as a highly profitable prestige beauty brand set to return to growth." She highlighted the company’s journey since its IPO, which saw sales initially grow at triple-digit rates to over $700 million annualized before normalizing to its current $400+ million run rate.
The analyst noted that after 2.5 years of normalization, Olaplex is finally seeing sales and margins stabilize. The company reported sales growth in the second quarter and could potentially return to positive annual growth in fiscal year 2025. Meanwhile, adjusted EBITDA margins are settling at industry-standard low-20% rates, down from previous levels exceeding 60%.
Olaplex’s stock movement reflects growing confidence that investments in marketing, merchandising, and innovation are beginning to yield results for the hair care brand.
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