Oddity Tech Ltd. (Nasdaq: ODD), the parent company of Israeli online beauty care brand IL Makiage, held its Wall Street IPO in July at a company valuation of $2 billion at $35 per share. The share price jumped within two weeks to $55, giving a market cap of $3 billion and a fantastic multiple on profitability of almost 80.
Then the stock began sliding an lost over 50% since its peak, to a recent low of around $26. Since Monday, the stock has jumped to nearly $30 on Wall Street, after the company published good preliminary results for the third quarter of 2023, giving the company a market cap of nearly $1.7 billion. Even after the increase, Oddity’s share price is trading more than 10% below its IPO price.
A decade ago IL Makiage was a failed company in the cosmetics industry with big debts to its creditors. Today it is a growing and profitable company, which defines itself as a consumer technology platform designed to change the world’s beauty care market.
Oran Holtzman, who acquired the company in 2013 for just NIS 12 million, is the company’s CEO and controlling shareholders while Louis Vuitton’s L Catterton private equity fund invested in 2017.
“The third quarter is expected to be our strongest third quarter ever”
In July’s IPO only a small amount of the money raised from the public was injected into the company, with most of the amount going to the controlling shareholders. Holtzman sold shares for $211 million and L Catteron sold shares for $151 million.
As for the business results, Oddity’s original forecast for third quarter revenue was $83 million, up 18%-23% from the corresponding quarter last year, while initial results from the third quarter indicate higher growth of 29%-31%, with revenue of about $89.6 million.
Gross profit, which according to the forecast was supposed to reach 67.5% of revenue, will reach 68.5%. Adjusted EBITDA will be 21-21.5% of revenue, compared with the earlier forecast of 20.8%, amount to over $18 million. “The third quarter is expected to be our strongest third quarter ever,” said CEO and founder Holtzman. He added that adjusted EBITDA will reach at least $89 million in the first three quarters of 2023 (compared to about $37 million in the corresponding period in 2022). “The strong financial results reflect the strength of our platform, which is built to make a difference in the global beauty and wellness markets through technology and use of data. We continue to show growth and profitability in both the IL Makiage brand and the SpoiledChild brand, and are building our growth engines for 2024 and beyond.” The forecast given in the previous quarter sees 2023 annual revenue of $475-480 million and adjusted EBITDA of $96-101 million.
Published by Globes, Israel business news – en.globes.co.il – on October 4, 2023.
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