Executive Summary:
Oddity Tech Ltd. is a consumer tech company, that focuses on transforming the beauty and wellness industries. They build and scale digital-first brands by leveraging artificial intelligence, molecular discovery, computer vision, and their data science platform. Their AI-driven online platform analyzes consumer data to identify needs and develop beauty, wellness, and technology products under brands like IL MAKIAGE and SpoiledChild. Oddity also operates ODDITY LABS, a biotech center utilizing AI for novel ingredient discovery.
Oddity Tech Ltd. has reported an EPS of $0.20, significantly beating the analysts’ forecast of $0.11. The revenue for the same quarter was $124 million, also surpassing the expected $119.03 million.
Stock Overview:
| Ticker | $ODD | Price | $43.90 | Market Cap | $2.45B |
| 52 Week High | $51.00 | 52 Week Low | $30.34 | Shares outstanding | 44.28M |
Company background:
Oddity Tech Ltd., founded in 2013 by siblings Oran Holtzman and Shiran Holtzman Erel, is a consumer tech company focused on disrupting the beauty and wellness industries. Initially incorporated in Israel, the company has established its business headquarters in New York City, a research and development center in Tel Aviv, and a biotechnology lab in Boston.
Oddity Tech operates with a unique approach, utilizing a vast data lake and advanced technologies like artificial intelligence, machine learning, computer vision, and AI-guided molecular discovery. Their core product strategy revolves around building and scaling digital-first brands that cater to consumer needs identified through their proprietary technology. Their prominent brands include IL MAKIAGE, known for its AI-powered PowerMatch system that matches users with their perfect makeup products online, and SpoiledChild, which focuses on wellness and anti-aging solutions leveraging the SpoiledBrain AI algorithm.
The competitive landscape for Oddity Tech includes both traditional beauty and wellness companies and other tech-driven disruptors. Key competitors in the broader consumer goods sector include established players like Coty and e.l.f. Beauty, as well as companies with an online presence. In the technology space, while not direct product competitors, companies focusing on AI-driven personalization and e-commerce solutions could be considered indirect competitors. Oddity’s strength lies in its integrated approach, combining deep technological capabilities with direct-to-consumer brand building, setting it apart from companies that may focus solely on one aspect.
Recent Earnings:
Oddity Tech Ltd. has reported a net revenue of $647 million, marking a substantial 27% year-over-year growth compared to $509 million in 2023. This growth highlights the success of their direct-to-consumer model and product innovation. The diluted EPS for the full year 2024 was $1.64, a increase from the $1.00 reported in the previous year. The revenue reached $124 million, also a 27% year-over-year increase, and the reported EPS was $0.20, which beat analysts’ expectations of $0.11.
They anticipate net revenue to be between $258 million and $262 million, with a gross margin of approximately 72% and adjusted diluted EPS between $0.61 and $0.63. For the full year ending December 31, 2025, Oddity Tech projects net revenue to be in the range of $776 million to $785 million, representing an approximate 20% year-over-year growth. They also expect a gross margin of around 70% and adjusted diluted EPS between $1.94 and $1.98.
Oddity Tech has demonstrated strong profitability with a gross margin of 72.4% for the full year 2024. Their adjusted EBITDA for the year was $150 million, representing a 23.3% margin and a 40% year-over-year increase. The company also reported a strong free cash flow of $134 million, converting over 130% of its net income into cash.
The Market, Industry, and Competitors:
Oddity Tech Ltd. operates within the dynamic and expanding beauty and wellness market. This sector encompasses a wide array of products, including skincare, hair care, makeup, fragrances, nutritional supplements, and wellness products, as well as related services and technologies. The market is characterized by evolving consumer preferences, a growing emphasis on health and well-being, the increasing influence of social media and digital platforms, and a rising demand for personalized and sustainable solutions. Oddity Tech’s strength lies in its tech-driven approach, utilizing AI and data science to cater to these evolving consumer needs within the beauty and wellness landscape.
Various reports indicate a strong upward trajectory, with estimates suggesting the global market could reach approximately $2.7 trillion to $3.3 trillion by 2030. This expansion is fueled by factors such as increasing disposable incomes, a growing middle-class population, rising awareness about personal care and well-being, and the impact of an aging global population seeking anti-aging solutions. Furthermore, the beauty tech segment, which aligns closely with Oddity Tech’s focus, is expected to be a significant growth driver, with projections indicating a compound annual growth rate (CAGR) of around 17% to 18% between 2025 and 2030, reaching a market size of over $170 billion by 2030.
The overall beauty and wellness market is also expected to exhibit a healthy CAGR in the range of 5% to 8% between 2025 and 2030. This consistent growth underscores the resilience and attractiveness of the market for companies like Oddity Tech, which are strategically positioned to leverage technological advancements and data-driven insights to capture market share and cater to the evolving demands of consumers seeking innovative beauty and wellness solutions.
Unique differentiation:
Oddity Tech Ltd. operates in the highly competitive beauty and wellness market, facing both traditional and emerging players. In the traditional realm, established beauty conglomerates like L’Oréal, Estée Lauder, and Revlon, with their wide product portfolios, strong brand recognition, and extensive distribution networks, pose significant competition. These companies are increasingly investing in digital strategies and personalized experiences to cater to evolving consumer demands, mirroring some of Oddity’s approaches. Additionally, mass-market brands such as e.l.f. Beauty also compete by offering affordable and trend-driven products with a strong online presence.
The rise of digitally native, direct-to-consumer (DTC) beauty and wellness brands represents another crucial segment of Oddity Tech’s competitive landscape. Companies like Glossier, Huda Beauty, and Charlotte Tilbury have cultivated strong online communities and leverage social media for marketing and sales, similar to Oddity’s IL MAKIAGE and SpoiledChild. These brands often focus on specific product categories or aesthetics, building intense customer loyalty. The beauty tech space is becoming increasingly crowded with companies offering AI-powered skin analysis, virtual try-on experiences, and personalized product recommendations, indicating a growing trend that Oddity Tech is also capitalizing on.
Oddity Tech Ltd. distinguishes itself from competitors through a powerful combination of technological innovation and a direct-to-consumer (DTC) business model focused on the beauty and wellness industries. Their core differentiation lies in their AI-driven platform that leverages a vast data lake of over 40 million unique users and billions of data points. This allows them to gain deep insights into consumer needs and preferences, enabling the development of highly targeted and personalized products under their brands, like IL MAKIAGE and SpoiledChild.
A key aspect of this differentiation is their proprietary PowerMatch algorithm for IL MAKIAGE and SpoiledBrain for SpoiledChild. These AI systems provide precise product recommendations, such as matching consumers with their perfect foundation shade online without ever stepping into a store. This technology enhances the customer experience, drives higher conversion rates, and reduces product returns, offering a significant advantage over traditional retail models and even other online beauty brands. Their investment in vision technology, allowing for skin and hair analysis through smartphone cameras, further personalizes the consumer journey.
Oddity Tech has established ODDITY LABS, a biotechnology center focused on AI-based molecular discovery. This initiative aims to revolutionize product efficacy by identifying and developing novel ingredients for beauty and wellness solutions, moving beyond traditional ingredient sourcing and formulation. This commitment to science-backed innovation and their ability to rapidly bring new, data-informed products to market through their established DTC channels creates a unique and difficult-to-replicate competitive edge in the dynamic beauty and wellness landscape.
Management & Employees:
Oran Holtzman serves as the Co-founder and Chief Executive Officer, providing the overall vision and strategic leadership for Oddity Tech.
Shiran Holtzman-Erel is the Co-founder and Chief Product Officer, driving the company’s product development and innovation efforts.
Lindsay Drucker Mann holds the position of Chief Financial Officer, responsible for the company’s financial strategy and operations.
Financials:
Oddity Tech Ltd. has net revenue that has grown from $222.6 million in 2021 to $647 million in 2024, reflecting a compound annual growth rate (CAGR) of approximately 41% over this period. Revenue increased by 45.8% in 2022, 56.7% in 2023, and 27% in 2024, underscoring sustained top-line momentum even as the company scaled.
Net income rose from $14 million in 2021 (implied from a 6.3% margin on $222.6 million revenue) to $101 million in 2024, yielding a five-year CAGR of roughly 45%. Adjusted EBITDA followed a similar trajectory, rising from $26.7 million in 2021 (12% margin) to $150 million in 2024 (23.3% margin), with margins expanding steadily each year. The company’s net margins improved from 6.3% in 2021 to 15.7%.
The company reported $169 million in cash and equivalents, with no outstanding debt. Free cash flow generation has been robust, with $134 million in 2024, up from $85 million in 2023, and a net operating cash flow of $138 million in 2024. Return on equity (ROE) has also been impressive, reaching 36% in 2024, and return on assets (ROA) is projected to hit 28%.
With revenue and earnings CAGRs above 40%, expanding profit margins, and a debt-free, cash-rich balance sheet. The company’s direct-to-consumer model, technology investments, and operational efficiency have positioned it as a leader in its sector.
Technical Analysis:
The stock has been in a consolidation zone between $32 and $50 for the last 18 months and still is attempting a move higher to the $50 zone, but should go back down after that with lots of resistance in that area.
Bull Case:
Unique AI and data-driven approach: Their ability to collect and analyze vast amounts of consumer data to identify unmet needs and develop highly targeted products under their IL MAKIAGE and SpoiledChild brands leads to higher product success rates, efficient marketing spend, and strong customer loyalty. The PowerMatch and SpoiledBrain algorithms demonstrate a clear technological edge in personalization, which is increasingly valued by consumers.
Efficient direct-to-consumer model: This model allows for greater control over the customer experience, higher margins compared to traditional retail, and direct feedback loops that fuel their AI and product development. This agile and responsive approach enables them to quickly iterate and adapt to consumer preferences, a crucial advantage in the fast-evolving beauty and wellness landscape. The ongoing shift towards online shopping further strengthens the appeal and effectiveness of their DTC strategy.
Bear Case:
High reliance on digital marketing and advertising makes Oddity susceptible to increasing customer acquisition costs. The beauty and wellness online space is becoming increasingly competitive, driving up the cost of digital advertising on platforms like social media. Changes in advertising algorithms or increased competition for ad space could significantly impact Oddity’s marketing efficiency and profitability if they cannot maintain a strong return on ad spend.
The unproven long-term success of ODDITY LABS and their AI-driven ingredient discovery introduces uncertainty. While promising, translating AI-discovered molecules into commercially successful beauty and wellness products is not guaranteed and involves significant research and development costs and timelines. Failure to generate impactful and profitable products from this venture could dampen investor enthusiasm.