The average target price of ODD is 55 and suggests 30% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 66.0. This translates into 57% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 46.0. This suggests 10% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Oddity Tech Ltd., together with its subsidiaries, operates as a consumer-tech company worldwide. The company provides beauty and wellness products utilizing its PowerMatch technology. It builds and scales digital-first brands to disrupt the offline-dominated beauty and wellness industries. The company offers products for face and complexion, eyes and brows, lips, and skin care under the IL MAKIAGE brand; and hair and skin care products under the SpoiledChild brand. The company was incorporated in 2013 and is based in Tel Aviv-Jaffa, Israel.

Israel

Oddity Tech Ltd.

Technology

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

ODD reported revenue of USD 647mn in the last 12 months, up 27% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS grew 73% from FY23 to USD 1.78. Market expects EPS to reach USD 1.78 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 9ppts and its growth decelerated by 4ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 25.4% in the last 12 months, up from 19.0% in FY23. 

Historically, ODD has reported strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 15.7%, a growth from 12.5% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 39.1%, above the peers. The consensus estimate for FY24 for RoCE is 153.5%, again ahead of the peers. 

Another important profitability metric, return on assets (RoA), amounted to 28.1% in the last 12 months, a decrease from 33.3% in FY23. The market analysts predict that RoA will be 82.6% in FY24, again stronger than its peers. 

Oddity Tech Ltd. reported a return on equity (RoE) of 43.0% in the last 12 months, down from 61.8% in FY23. The market consensus projects an RoE of 118.1% in FY24, again ahead of its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.3 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

ODD boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually quite stable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. 

No other major risks have been identified.

The risk of default is low. We note resilient historical revenue growth, solid return on capital, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, ODD is as volatile as an index. In other words, the stock will move with the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be limited. 

In normal market circumstances, ODD is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from significant to immense. We would also like to highlight the immense intraday volatility of the instrument. 

Based on key historical and expected multiples, the stock is greatly overvalued relative to its peers. Specifically, the stock is fairly valued on P/E, overvalued on EV/EBITDA, overpriced on P/FCF. 

Oddity Tech Ltd.

$ 41.95

4

Oddity Tech Ltd.

$ 41.95

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 41.95

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