Oddity Tech: A Unique Fusion Of Beauty And Tech

Core Viewpoint - Oddity Tech is a consumer tech company that integrates AI and machine learning into the beauty industry, showcasing a unique approach to product personalization and development, which has led to impressive growth and a promising valuation [1][4][17] Company Overview - Oddity Tech operates under a direct-to-consumer (DTC) model, leveraging technology to disrupt the traditional beauty industry [1] - The company went public in 2023 at a price of $35 and is headquartered in Israel [1] Technology and Innovation - Over 40% of Oddity's workforce is involved in engineering and data science, indicating a strong tech foundation [2] - The company utilizes AI for product matching based on individual skin types, employing computer vision and hyperspectral imaging for analysis [3] - Oddity Labs, the company's biotech lab, focuses on developing new molecules and peptides using AI, with proprietary products like Fibroquin aimed at improving skin health [4] Financial Performance - In Q1, Oddity reported revenue of $212 million, a 28% year-over-year growth, with earnings per share (EPS) of $0.61, both exceeding expectations [7] - The company anticipates an EPS range of $1.57 to $1.62 and revenue between $626 million and $635 million for the year [7] Customer Retention - Oddity boasts a repeat revenue rate exceeding 50%, with a 12-month net revenue repeat rate of 100%, indicating strong customer loyalty [5][6] Product Portfolio - Oddity currently has two brands: IL MAKIAGE, launched in 2018, and SpoiledChild, launched in 2022, with a third brand expected to launch next year [8][9] - The beauty industry represents a $600 billion total addressable market (TAM), with the skincare market projected to reach $186 billion by 2028, providing ample growth opportunities [10] Valuation Metrics - Oddity's valuation multiples are above average for a growth company, with an enterprise value (EV) multiple of 15.84, approximately 46% above the sector median [11] - Despite high multiples, the company's growth justifies the valuation, with trailing and forward PEG ratios over 40% below the sector median [11] Market Outlook - Wall Street's average price target for Oddity is around $52, suggesting potential for further stock appreciation [12]