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We came across a bullish thesis on Oddity Tech Ltd. (ODD) on Substack by Lorenzo Bastianelli. In this article, we will summarize the bulls’ thesis on ODD. Oddity Tech Ltd. (ODD)'s share was trading at $44.05 as of March 6th. ODD’s trailing P/E was 26.84 according to Yahoo Finance.
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Oddity Tech continues to exceed expectations, reporting $123.6 million in revenue for the quarter, marking a 27% year-over-year (YoY) increase. This outpaces the company's long-term growth target of 20% and reinforces the management’s pattern of under-promising and over-delivering. Notably, Oddity achieved a gross margin of 72.7%, its highest since 2020, reflecting strong brand equity, premium pricing power, and an improving margin profile that is narrowing the gap with industry leaders like L’Oréal. These results signal sustained momentum as Oddity strategically expands its portfolio and leverages its direct-to-consumer model.
For FY2025, Oddity has guided revenue between $776 million and $785 million, representing 20%-21% YoY growth. However, management’s commentary suggests this estimate may be conservative. CEO Oran Holtzman outlined IL MAKIAGE’s trajectory toward $1 billion in revenue by 2028, implying a compound annual growth rate (CAGR) of 19%, with near-term growth likely exceeding 20%. Similarly, SpoiledChild, still in an earlier growth phase, is expected to scale at an even faster rate, backed by strong repeat purchases and a high average order value. The company is also set to introduce a third brand in FY2025, which, though initially contributing modestly, adds another growth lever. Given these factors, Oddity’s actual revenue growth could land between 22% and 27%, surpassing guidance if macroeconomic conditions remain stable.
A major growth driver is international expansion, which has been a relatively untapped opportunity. Oddity has begun ramping up in existing markets like the U.K., Germany, and Australia, while testing new geographies. Early signs are positive, reinforcing management’s belief that international revenue can scale significantly over time. Additionally, rising repeat purchases and increasing customer lifetime value indicate that Oddity’s brands are successfully deepening relationships with their consumer base.
Despite the strong financial performance, one concerning metric is organic website traffic, which has been flat to declining YoY for both IL MAKIAGE and SpoiledChild. This suggests that while the company is excelling at engaging existing customers—evidenced by higher order values and strong retention—it is not significantly expanding its new customer base through word-of-mouth at the expected pace. This divergence between revenue growth and organic traffic warrants further scrutiny, as sustained growth will require continued customer acquisition alongside increased spending from loyal customers.