Oddity Tech Stock Surges as Provisional Quarterly Earnings Impress Wall Street

Key takeaways

• AI beauty company Oddity Tech just posted stellar growth and sales
• The company wants to take on legacy beauty brands using AI for its companies, Il Makiage and Spoiled Child
• Oddity recently listed on the Nasdaq and has suffered the same drop in its share price as other companies have recently experienced

Oddity Tech, the AI company behind makeup brands Il Makiage and Spoiled Child, saw a nice lift in its share price this week after its provisional earnings report showed healthy revenue growth.

It’s still not at the same levels its IPO achieved, which has suffered the same curse as other recent market debuts like Arm and Instacart, but investors were still impressed with the company’s growth trajectory.

Here’s everything you need to know about the latest new beauty disruptor and why Wall Street is still keen on the brand.

What happened with Oddity Tech’s earnings?

You’d be forgiven for not having heard of Oddity Tech, which uses AI to develop the products for its makeup brands, Il Makiage and Spoiled Child, but the Tel Aviv-based company has been listed on the Nasdaq since July.

It’s looking to disrupt the beauty industry by using artificial intelligence to help choose customers’ products and develop formulas.

Investors were cheered by the company’s provisional quarterly earnings that were announced this week. It didn’t post exact sales figures for the quarter but said revenue had grown between 29% and 31%. Its year-ago revenue figure was $68.9 million.

The AI company is now also anticipating a 68.5% gross margin for the quarter, up slightly from its 67.5% guidance. So far this year, sales have climbed 58% to at least $89 million.

What was the stock market reaction?

Given Oddity is a pretty new listing on the stock market, it’s suffered the same fizzled excitement as other recent IPOs. The shares popped 35% higher on the first day, closing at over $47, having priced the shares at $35. But now, the hype has waned, and Oddity shares are trading at $28.

Oddity Tech is backed by shareholders like L Catterton, who coincidentally are about to take another company, sandal maker Birkenstock, public as well. The AI company raised $424 million from its debut.

The AI company has big growth plans. It announced plans earlier this year to acquire biotech start-up Revela and opened Oddity Labs to address everyday ageing problems like hair loss and wrinkles, using AI.

The business wants Oddity Labs to have 10 products ready for the market in 2024. Its CEO, Oran Holtzman, said the Labs are “delivering game-changing ingredient innovation.”

That might be why Oddity’s share price rose 13% at the news of its pretty impressive earnings report on Monday.

The bottom line

Oddity Tech’s debut may have underwhelmed after the initial rush, but the growth potential for the company clearly has caught Wall Street’s eye. With some smart investments and a clear path towards releasing new products in the next 12 months, Oddity is one stock to watch.