Oddity Tech Ltd. (NASDAQ:ODD) is one of the best performing new tech stocks to invest in. On October 8, KeyBanc lowered the firm’s price target on Oddity to $80 from $90, while keeping an Overweight rating on the shares. This sentiment came ahead of the company’s Q3 2025 earnings report, as KeyBanc believes that the setup is mixed across the Healthcare Information Technology landscape. Earlier in Q2, Oddity Tech generated a net revenue of $241 million, which marked a 25% year-over-year increase from $193 ...

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Core Insights - ODDITY Tech Ltd. reported strong Q2 2025 results, with net sales and earnings exceeding estimates and showing year-over-year growth [1][3] - The company raised its full-year outlook, driven by robust top-line growth and strategic investments in innovation [2] Financial Performance - Adjusted EPS for Q2 was 92 cents, beating the estimate of 88 cents, and increased by 12.2% year-over-year [3] - Net sales reached $241.1 million, surpassing the estimate of $239 million, and grew by 25.1% from $192.8 million in the prior year [3] - Online DTC sales rose by 29.6% to $235.2 million, constituting 98% of total sales, up from 94% in the previous year [4] Margin and Cost Analysis - Gross profit was $174.4 million, a 25.3% increase from $139.1 million last year, with a gross margin of 72.3% [5] - SG&A expenses increased by 36.3% to $117.3 million, representing 48.6% of net sales, up 200 basis points year-over-year [5] - Operating income was $57.1 million, a 7.6% increase, while the operating margin declined to 23.7% [6] Strategic Developments - ODDITY's core brands, IL MAKIAGE and SpoiledChild, achieved double-digit online sales growth, supported by AI-driven personalization [10] - The company is on track to launch Brand 3 in Q4 2025, targeting the medical-grade dermatology segment, and Brand 4 is expected to launch in 2026 [11] - ODDITY raised $600 million through its first exchangeable note offering, indicating strong investor confidence [12] Future Guidance - For FY25, ODDITY expects net sales between $799 million and $804 million, reflecting 23-24% year-over-year growth [13] - Adjusted EBITDA is projected between $160 million and $162 million, with adjusted EPS expected between $2.06 and $2.09 [14] - For Q3 2025, net sales are anticipated to be between $144 million and $146 million, indicating year-over-year growth of 21-23% [14] Financial Health - As of June 30, 2025, ODDITY had cash and cash equivalents of $656.8 million, no long-term debt, and shareholders' equity of $351.2 million [9]

Core Insights - ODDITY Tech Ltd. reported strong financial results for Q2 2025, exceeding guidance across revenue, profit, and earnings per share, indicating robust business growth and profitability [2][4][6] - The company is expanding into new markets, particularly in healthcare with the upcoming launch of Brand 3, which focuses on medical-grade products [3][4] - ODDITY raised its full-year financial outlook for 2025, reflecting confidence in continued growth driven by a backlog of repeat orders [4][9] Financial Performance - Q2 2025 net revenue reached $241 million, a 25% increase year-over-year from $193 million in Q2 2024 [4][6] - Adjusted EBITDA for Q2 2025 was $70 million, up 12% from $62 million in Q2 2024, with an adjusted EBITDA margin of 28.8% [4][6] - Net income for Q2 2025 was $49 million, compared to $45 million in Q2 2024, with a net income margin of 20.4% [4][6] Financial Outlook - The updated full-year 2025 outlook includes net revenue between $799 million and $804 million, representing year-over-year growth of 23% to 24% [9][10] - For Q3 2025, ODDITY expects net revenue between $144 million and $146 million, with a gross margin of approximately 68% [11][9] - Adjusted diluted EPS for the full year is projected to be between $2.06 and $2.09, an increase from the previous outlook [9][10] Strategic Initiatives - The company is progressing towards the formal launch of Brand 3 in Q4 2025 and Brand 4 in 2026, indicating a focus on innovation and market expansion [5][4] - ODDITY is also developing its ODDITY LABS molecule discovery platform, which may enhance its product offerings in the future [5][4] - The company completed its first exchangeable note offering, upsized to $600 million, strengthening its cash position [5][4]

Core Insights - Oddity Tech (ODD) is set to announce its second-quarter 2025 results on August 4, with expected non-GAAP earnings between $0.85 and $0.89 per share and revenues anticipated between $235 million and $239 million [1][9] Earnings Expectations - The Zacks Consensus Estimate for second-quarter earnings is at $0.88 per share, reflecting a year-over-year growth of 7.3%, while the revenue consensus is $239.2 million, indicating a 24.1% year-over-year increase [2] Historical Performance - ODD has consistently exceeded the Zacks Consensus Estimate in the past four quarters, achieving an average surprise of 32.8% [2] Growth Drivers - The company is expected to benefit from a growing user base, an expanding online presence, and a strong direct-to-consumer (DTC) platform, which are anticipated to drive revenue growth [4] - Strong demand for IL Makiage and SpoiledChild brands is likely to contribute positively to revenue in the upcoming quarter [5][9] Margin Considerations - Despite the expected revenue growth, gross margins may be negatively impacted by higher tariffs, which are projected to affect margins by 50 to 100 basis points [5][9] Earnings Prediction Model - According to the Zacks model, ODD has a positive Earnings ESP of +1.14% and a Zacks Rank of 1 (Strong Buy), indicating a favorable outlook for an earnings beat [6]

Company Overview - ODDITY Tech Ltd. is a consumer tech company focused on building and scaling digital-first brands to disrupt the offline-dominated beauty and wellness industries [3] - The company serves approximately 60 million users through its AI-driven online platform, utilizing data science to identify consumer needs and develop beauty and wellness products [3] - ODDITY owns brands such as IL MAKIAGE and SpoiledChild, with headquarters in New York City, an R&D center in Tel Aviv, Israel, and a biotechnology lab in Boston [3] Financial Results Announcement - ODDITY will release its second quarter 2025 financial results after the market close on August 4, 2025 [1] - A conference call to discuss the financial results will take place on August 5, 2025, at 8:30 a.m. Eastern Time [1] Conference Call Details - Participants can join the conference call by dialing 1-800-717-1738 (US) or 1-646-307-1865 (international) [2] - A webcast of the call will be available on the Investors section of ODDITY's website, with a recording accessible shortly after the call [2]

Core Viewpoint - Oddity Finance LLC, a subsidiary of ODDITY Tech Ltd, is pricing $525 million of 0% exchangeable senior notes due 2030, increasing from a previously announced offering size of $350 million [1][2] Group 1: Offering Details - The offering is expected to close on June 12, 2025, and will result in approximately $510.6 million in net proceeds after deducting initial purchasers' discounts [1] - The Issuer has granted initial purchasers an option to purchase an additional $75 million of notes within a 13-day period [1] - The notes will be senior, unsecured obligations and will not bear regular interest, maturing on June 15, 2030 [3] Group 2: Use of Proceeds - Net proceeds will be used for general corporate purposes, with no immediate plans for material acquisitions, but potential for strategic M&A in the future [2] - Approximately $55.3 million of the net proceeds will be allocated to capped call transactions [2] Group 3: Capped Call Transactions - Capped call transactions are designed to reduce potential dilution of ODDITY's Class A ordinary shares upon exchange of the notes [4] - The initial cap price for these transactions is set at $138.92 per share, representing a 100% premium over the last reported sale price [5] Group 4: Exchange and Redemption Terms - The notes are exchangeable at an initial rate of 10.8655 Class A ordinary shares per $1,000 principal amount, with an exchange price of approximately $92.03 per share, reflecting a 32.5% premium [9] - The Issuer may redeem the notes starting June 20, 2028, under specific conditions related to the stock price [10] Group 5: Company Overview - ODDITY is a consumer tech company focused on disrupting the beauty and wellness industries through digital-first brands, serving approximately 60 million users [16]

Group 1 - Oddity Finance LLC intends to offer $350 million of exchangeable senior notes due 2030, with an option for an additional $50 million, subject to market conditions [1][2] - The net proceeds from the offering will be used for general corporate purposes, including potential strategic M&A and capped call transactions [2][7] - The notes will be senior, unsecured obligations guaranteed by ODDITY and its subsidiary, with no regular interest and a maturity date of June 15, 2030 [3][9] Group 2 - Capped call transactions are expected to reduce potential dilution of ODDITY's Class A ordinary shares upon exchange of the notes [4][5] - The notes will be exchangeable for cash or ODDITY's Class A ordinary shares, with specific conditions for exchange prior to March 15, 2030 [9][10] - The issuer may redeem the notes starting June 20, 2028, under certain conditions related to the stock price [10][11] Group 3 - As of March 31, 2025, ODDITY had $257 million in cash and an undrawn $200 million credit line, indicating strong liquidity [7] - ODDITY is a consumer tech company focused on disrupting the beauty and wellness industries through digital-first brands and AI-driven solutions [16]

Core Viewpoint - Oddity Tech Ltd. has demonstrated significant stock performance, with a 51.9% increase over the past month, outperforming both the Zacks Computer and Technology sector and the Zacks Internet - Software industry [1] Financial Performance - In Q1 2025, Oddity Tech reported revenues of $268 million, a 27% year-over-year increase, exceeding the Zacks Consensus Estimate by 2.86% [2] - Earnings per share for the same quarter were 69 cents, reflecting a 13% increase from the previous year and surpassing expectations by 9.52% [2] Industry Trends - The ongoing structural transformation in the industry, particularly the shift to online channels, is benefiting Oddity Tech as consumer preferences lean towards digital-first experiences [3] Brand Performance - Oddity Tech's growth is supported by its strong portfolio of consumer brands, with IL Makiage and SpoiledChild both achieving double-digit revenue growth in Q1 [4] - IL Makiage is projected to reach a revenue target of $1 billion by 2028, with IL Makiage Skin expected to contribute nearly 40% of total revenues this year [5] - SpoiledChild is on track to exceed $200 million in revenues in 2025, demonstrating strong consumer adoption and healthy margins [6] Innovation and Expansion - Oddity Tech is expanding its product portfolio, with Brand 3 set for a soft launch in Q3 2025 and Brand 4 planned for 2026 [7] - The company's proprietary molecule discovery platform, ODDITY LABS, is enhancing its ability to deliver innovative products [7] - International expansion is gaining momentum, with double-digit growth reported in France, Italy, and Spain, indicating successful scaling efforts [8] Future Outlook - For Q2 2025, Oddity Tech anticipates revenues between $235 million and $239 million, representing a 22-24% year-over-year increase [9] - The company expects adjusted earnings per share to be between 85 cents and 89 cents, with a consensus estimate of 88 cents per share [10] - For fiscal 2025, projected revenues are between $790 million and $798 million, indicating a 22-23% year-over-year growth [10] - Adjusted earnings per share for fiscal 2025 are expected to be between $1.99 and $2.04, with a consensus estimate of $2.02 per share [11] Investment Opportunity - Oddity Tech is positioned as a compelling investment opportunity due to its strong revenue and earnings growth, robust innovation pipeline, and accelerating global expansion [12] - The company is recommended as a strong buy, reflecting its potential for long-term value creation in the beauty and wellness sector [13]

Core Viewpoint - The U.S. stock market is experiencing volatility, with the S&P 500 declining 0.8% in April, marking its third consecutive monthly drop, while GDP shrank 0.3%, the first decline since early 2022. However, strong consumer spending and a stable job market indicate underlying confidence in the economy [1]. Group 1: Investment Strategy - In uncertain market conditions, a relative price strength strategy can help investors identify stocks that outperform their peers, thus staying aligned with market momentum [2]. - Stocks that show better performance than their industry or benchmark should be included in investment portfolios, as they are more likely to yield significant returns [4]. - It is essential to assess whether a stock has upside potential, particularly those that have outperformed the S&P 500 over the past 1 to 3 months and possess solid fundamentals [5]. Group 2: Screening Parameters - The screening criteria for identifying potential stocks include positive relative price changes over 12 weeks, 4 weeks, and 1 week, as well as positive current-quarter estimate revisions [7]. - Stocks must have a Zacks Rank of 1 (Strong Buy), a current price of at least $5, and an average 20-day trading volume of at least 50,000 to ensure adequate liquidity [8]. Group 3: Featured Stocks - **Kaiser Aluminum Corporation (KALU)**: Expected earnings growth of 66.1% for 2025, with a market cap of $1.1 billion. The Zacks Consensus Estimate for 2025 earnings has increased by 35.4% over the past 30 days, although shares have decreased by 29.3% in the past year [10][11]. - **Sprouts Farmers Market, Inc. (SFM)**: Anticipated earnings growth of 30.7% for 2025, with shares rising 131.9% in the past year. The company has consistently beaten earnings estimates, with a trailing four-quarter earnings surprise of approximately 16.5% [12][13]. - **BGC Group, Inc. (BGC)**: Projected EPS growth rate of 23.2% year-over-year for 2025, with a favorable expected growth rate of 24.7% over the next three to five years compared to the industry average of 13.8%. Shares have gained 7% in the past year [14][15]. - **ODDITY Tech Ltd. (ODD)**: Expected earnings growth of 3.1% for 2025, with shares increasing by 95.8% in the past year. The company has a trailing four-quarter earnings surprise of about 32.8% [16][17].