Shares of Hair Products Maker Olaplex Soar on Earnings Beat

Hair products maker Olaplex shares jumped over 10% in pre-market trading on Tuesday after the company reported better-than-expected revenue in the holiday quarter and lifted its annual sales outlook.

Santa Barbara, California-based company said its net sales climbed over 78% to $166.5 million in the fourth quarter ended December 31, 2021; Net sales increased 95.4% in the United States and 61.4% internationally. That beat the Wall Street consensus estimates of $9.44 million.

The company reported adjusted diluted EPS of $0.10 in the fourth quarter, in line with market consensus. For the fiscal year 2022, the company forecasts net sales in the range of $796 million-$826 million and adjusted net income of $363 million-$379 million.

Following this, Olaplex Holdings’ stock rose over 10% to $15.48 in pre-market trading on Tuesday. However, the stock slumped more than 50% so far this year.

“We’re satisfied with steady outperformance and upward direction to model but expect stock volatility to persist,” noted Stephanie Wissink, equity analyst at Jefferies.

Analyst Comments

“We expect a significant positive stock reaction and relief rally in the stock after market induced weakness in the stock recently given the fundamental outlook clearly remains strong,” noted Dara Mohsenian, equity analyst at Morgan Stanley.

‘We view Olaplex as a unique strong topline growth story, with balanced onmi-channel growth in professional/e-commerce/retail channels, and continued expansion potential beyond its professional heritage, with strong near-term visibility.”

Olaplex Stock Price Forecast

Three analysts who offered stock ratings for Olaplex in the last three months forecast the average price in 12 months of $37.00 with a high forecast of $50.00 and a low forecast of $25.00.

The average price target represents a 163.16% change from the last price of $14.06. All of those three analysts rated “Buy”, according to Tipranks.

Morgan Stanley gave the base target price to $34 with a high of $77 under a bull scenario and $10 under the worst-case scenario. The investment bank gave an “Overweight” rating on the hair products maker’s stock.

Several analysts have also updated their stock outlook. Piper Sandler raised the price target to $36 from $34. BofA initiated coverage with a buy rating and a $37 price objective. Truist Securities started coverage with a buy rating and target price of $35. Raymond James initiated coverage with a strong buy rating and a $37 price target.

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