Oddity Tech Ltd (NASDAQ: ODD)

Sector: Technology Industry: Software - Infrastructure CIK: 0001907085
Market Cap 1.99 Bn
P/B 5.23
P/E 18.07
P/S 2.55
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,...

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Price action

Investment thesis

Bull case

  • 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.

Bear case

  • 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 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.75 2.69
EV to Cash from Ops. EV/CFO 17.84 28.91
EV to Debt EV to Debt 3.19 19.83
EV to EBIT EV/EBIT 14.35 -9.95
EV to EBITDA EV/EBITDA 14.71 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 20.14 26.09
EV to Market Cap EV to Market Cap 0.97 0.36
EV to Revenue EV/Rev 2.48 -9.34
Price to Book Value [P/B] P/B 5.23 3.88
Price to Earnings [P/E] P/E 18.07 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Int. cover (Qtr) 0.00 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -67.34 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 588.77 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 8.74 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 3.34 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) 4.68 20.13
EBT Growth (1y) % EBT 1y % (Qtr) 4.68 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 11.36 67.50
FCF Growth (1y) % FCF 1y % (Qtr) -21.13 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 28.04 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.70 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 5.67 1.22
Current Ratio Curr Ratio (Qtr) 7.54 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 1.60 -0.96
Interest Cover Ratio Int Coverage (Qtr) 0.00 -14.20
Times Interest Earned Times Interest Earned (Qtr) 0.00 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 18.70 -548.16
EBIT Margin % EBIT Margin % (Qtr) 17.31 -199.84
EBT Margin % EBT Margin % (Qtr) 17.31 -607.20
Gross Margin % Gross Margin % (Qtr) 73.10 51.88
Net Profit Margin % Net Margin % (Qtr) 14.10 -610.00