Oddity Tech Ltd (ODD) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001907085

P/B 6.24

P/E 21.55

P/S 3.04

Market Cap 2.37 Bn

ROIC (Qtr) 9.39

Div Yield % 0.00

Rev 1y % (Qtr) 24.29

Total Debt (Qtr) 607.34 Mn

Debt/Equity (Qtr) 1.60

About

ODDITY Tech Ltd, also known as ODDITY, is a consumer tech platform that operates within the global beauty and wellness market. Incorporated in Israel in 2013, the company has transformed the way millions of consumers shop for beauty products by bringing them online. ODDITY's primary business activities revolve around its digital brands, including IL MAKIAGE and SpoiledChild. These brands cater to a diverse customer base and are supported by the company's robust in-house technology capabilities. With leading expertise in data science, machine learning,...

ODDITY Tech Ltd, also known as ODDITY, is a consumer tech platform that operates within the global beauty and wellness market. Incorporated in Israel in 2013, the company has transformed the way millions of consumers shop for beauty products by bringing them online.

ODDITY's primary business activities revolve around its digital brands, including IL MAKIAGE and SpoiledChild. These brands cater to a diverse customer base and are supported by the company's robust in-house technology capabilities. With leading expertise in data science, machine learning, and computer vision, ODDITY's technology team makes up over 40% of its global headcount, demonstrating the company's commitment to technological innovation.

In the beauty and wellness segment, ODDITY operates in a large market with secular tailwinds, high growth, and a compelling gross margin profile. The company's technology-powered model allows it to reach a broad and diverse audience in this sector. In fact, almost half of its customers make their first online beauty purchase with ODDITY.

IL MAKIAGE, ODDITY's first digital brand, was launched in 2018 and has since become the largest online beauty brand in the United States. Its strong international presence has disrupted traditional beauty shopping experiences, bringing them online and enhancing consumer experiences. Following the success of IL MAKIAGE, ODDITY launched SpoiledChild in 2022, a multicategory wellness brand that includes hair and skin products. This brand has seen impressive performance, reflecting the strength of ODDITY's New Ventures incubator and its data and technology-enabled platform.

ODDITY LABS, an industry-leading biotechnology center, is at the forefront of artificial intelligence-based molecule discovery. The company develops a wide range of proprietary ingredients, including novel molecules, probiotics, and peptides, for high-performing and science-backed beauty and wellness products. This initiative addresses a broad spectrum of consumer needs, further solidifying ODDITY's position in the industry.

ODDITY's competitive advantage lies in its technology-powered model, which eliminates significant friction for customers and supports a seamless end-to-end user experience. The company's data-centric strategy enables it to create and deliver superior products to its customers and build differentiated brands across the beauty and wellness space. ODDITY's customers are primarily individuals who shop for beauty and wellness products online. The company boasts a diverse customer base, with customers from various age groups, skin tones, and purchasing behaviors.

ODDITY's product and service offerings include IL MAKIAGE and SpoiledChild, both of which cater to the beauty and wellness market. These brands are supported by ODDITY LABS, which develops proprietary ingredients for advanced beauty and wellness products. The company's commitment to technology and data-driven insights sets it apart in the industry, providing a unique and seamless user experience for its customers.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 592M provide 85.28x coverage of short-term debt 6.94M, demonstrating strong liquidity position and minimal refinancing risk.
Robust free cash flow of 96.30M exceeds capital expenditure of 12.40M by 7.76x, indicating strong organic growth funding capability.
Operating cash flow of 108.70M provides solid 1.04x coverage of current liabilities 104.38M, showing strong operational health.
Operating cash flow of 108.70M fully covers other non-current liabilities 23.67M by 4.59x, showing strong long-term stability.
Free cash flow of 96.30M provides healthy 0.92x coverage of current liabilities 104.38M, showing strong operational health.

Cons

Operating cash flow of 108.70M barely covers its investment activities of (46.45M), with a coverage ratio of -2.34, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
The company's operating cash flow of 108.70M shows concerning coverage of stock compensation expenses of 34.19M, with a 3.18 ratio indicating potential earnings quality issues.
Long-term investments of 152.81M represent a high 4.51x of fixed assets 33.85M, indicating potential overexposure to financial assets versus operational capabilities.
Operating cash flow of 108.70M is outpaced by equity issuance of (78.93M) (-1.38 ratio), indicating concerning reliance on equity markets for funding operations.
R&D investment of 0 represents just 0x of SG&A expenses of 449.81M, indicating potential underinvestment in innovation relative to administrative overhead.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	2.09	2.56
EV to Cash from Ops.	21.37	38.32
EV to Debt	3.82	-11.37
EV to EBIT	17.19	-12.79
EV to EBITDA	17.62	7.72
EV to Free Cash Flow [EV/FCF]	24.12	24.22
EV to Market Cap	0.98	0.58
EV to Revenue	2.97	-35.00
Price to Book Value [P/B]	6.24	3.74
Price to Earnings [P/E]	21.55	-18.61

Dividend Metrics

Metric	Value	Industry	Percentile
Dividend Coverage Ratio	0.00	-0.30
Dividend Payout Ratio %	0.00	2.69
Dividend per Basic Share	0.00	0.10
FCF Dividend Payout Ratio %	0.00	1.67
Interest Coverage	0.00	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	-67.34	-404.11
Cash and Equivalents Growth (1y) %	588.77	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	8.74	31.15
EBITDA Growth (1y) %	3.34	49.02
EBIT Growth (1y) %	4.68	25.85
EBT Growth (1y) %	4.68	17.82
EPS Growth (1y) %	11.36	70.69
FCF Growth (1y) %	-21.13	295.45
Gross Profit Growth (1y) %	28.04	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.70	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	5.67	1.21
Current Ratio	7.54	2.57
Debt to Equity Ratio	1.60	-0.93
Interest Cover Ratio	0.00	-13.15
Times Interest Earned	0.00	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	18.70	-544.82
EBIT Margin %	17.31	-197.78
EBT Margin %	17.31	-602.74
Gross Margin %	73.10	52.06
Net Profit Margin %	14.10	-605.52

Oddity Tech Ltd (NASDAQ: ODD)