Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Oddity demonstrated strong financial performance in the third quarter of 2024, showcasing robust growth metrics amidst a challenging retail environment.</li><li>Revenue for the first nine months of 2024 increased by 27% year-over-year, reaching $523 million, which is significantly higher compared to the mid-single-digit growth rates posted by large-cap competitors.</li><li>Adjusted EBITDA was reported at $135 million, with a conversion of approximately 90% to free cash flow, equating to $119 million.</li></ul>

Oddity demonstrated strong financial performance in the third quarter of 2024, showcasing robust growth metrics amidst a challenging retail environment.Revenue for the first nine months of 2024 increased by 27% year-over-year, reaching $523 million, which is significantly higher compared to the mid-single-digit growth rates posted by large-cap competitors.Adjusted EBITDA was reported at $135 million, with a conversion of approximately 90% to free cash flow, equating to $119 million.

Oddity Tech Ltd.: An Analysis Of Its Innovation in Technology & Product Development & Other Major Drivers

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

<ul>
<li>Oddity Tech, owner of famous global brands IL MAKIAGE and SpoiledChild, is growing slower than in 2022 and 2023. The overall growth will slow down to ~20% y/y in 2025.</li>
<li>According to my estimates and SEC filings, private equity firm L Catterton, the largest shareholder, reduced its stake in Oddity Tech to 18.4%, down from ~42% prior to an IPO.</li>
<li>I see ~34% downside risk in Oddity Tech stock as growth will slow down and the company will launch new brands only in the second half of 2025.</li>
</ul>


Oddity Tech, owner of famous global brands IL MAKIAGE and SpoiledChild, is growing slower than in 2022 and 2023. The overall growth will slow down to ~20% y/y in 2025.
According to my estimates and SEC filings, private equity firm L Catterton, the largest shareholder, reduced its stake in Oddity Tech to 18.4%, down from ~42% prior to an IPO.
I see ~34% downside risk in Oddity Tech stock as growth will slow down and the company will launch new brands only in the second half of 2025.


Oddity Tech: ~34% Downside Risk As Growth Will Slow Down

<ul><li>ODDITY's Q2 2024 earnings report shows substantial growth and operational efficiency, indicating strong performance and an aggressive growth trajectory.</li><li>The company posted a 28% increase in first-half revenue, reaching $404 million, alongside an impressive $110 million in adjusted EBITDA and $104 million in free cash flow.</li><li>Such figures not only indicate potent financial health but also highlight ODDITY's strategic efficiency, outpacing legacy incumbents significantly.</li></ul>

ODDITY's Q2 2024 earnings report shows substantial growth and operational efficiency, indicating strong performance and an aggressive growth trajectory.The company posted a 28% increase in first-half revenue, reaching $404 million, alongside an impressive $110 million in adjusted EBITDA and $104 million in free cash flow.Such figures not only indicate potent financial health but also highlight ODDITY's strategic efficiency, outpacing legacy incumbents significantly.

Oddity Tech Ltd.: Brand Development & Diverse Portfolio Driving Our Optimism! - Major Drivers

<ul><li>ODDITY, a data-driven beauty platform, posted strong financial results, reaching two important milestones in 2023: surpassing $500 million in revenue and generating over $100 million of adjusted EBITDA. The company's net revenue grew 57% to $509 million, while adjusted EBITDA surged 173% to $107 million.</li><li>ODDITY's online platform, launched only five years ago, currently has over 50 million users and is responsible for these robust financial results.</li><li>Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.</li></ul>

ODDITY, a data-driven beauty platform, posted strong financial results, reaching two important milestones in 2023: surpassing $500 million in revenue and generating over $100 million of adjusted EBITDA. The company's net revenue grew 57% to $509 million, while adjusted EBITDA surged 173% to $107 million.ODDITY's online platform, launched only five years ago, currently has over 50 million users and is responsible for these robust financial results.Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Oddity Tech Ltd.: Initiation Of Coverage - What Is The Significance of Brand & What Are The Product Range Expansions? - Major Drivers

Equity Capital Markets

<ul>
<li>Oddity Tech, the owner of popular and fastest-growing global brands IL MAKIAGE and SpoiledChild, set terms for an upcoming IPO. The company offers ~10.5M Class A shares. </li>
<li>Selling shareholders (private equity firm L. Catterton and Oran Holtzman, Co-founder &amp; CEO) offer ~8.77M Class A shares, while Oddity Tech offers ~1.75M Class A shares.</li>
<li>The net proceeds from the sale of Class A shares will be ~$41M. Oddity Tech will not receive any proceeds from the sale of shares by the selling shareholders. </li>
</ul>


Oddity Tech, the owner of popular and fastest-growing global brands IL MAKIAGE and SpoiledChild, set terms for an upcoming IPO. The company offers ~10.5M Class A shares. 
Selling shareholders (private equity firm L. Catterton and Oran Holtzman, Co-founder &amp; CEO) offer ~8.77M Class A shares, while Oddity Tech offers ~1.75M Class A shares.
The net proceeds from the sale of Class A shares will be ~$41M. Oddity Tech will not receive any proceeds from the sale of shares by the selling shareholders. 


Oddity Tech IPO Valuation Analysis: Growth and Profitability, Solid Upside With Limited Risk

United States

Oddity Tech Ltd operates as a consumer technology company. The Company offers an artificial intelligence driven online platform that deploy data science to identify consumer needs and develop solutions in the form of beauty and wellness products. Oddity Tech serves clients globally.

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Oddity Tech (ODD US)

Oddity Tech Ltd.: An Analysis Of Its Innovation in Technology & Product Development & Other Major Drivers

Oddity demonstrated strong financial performance in the third quarter of 2024, showcasing robust growth metrics amidst a challenging retail...

Baptista Research

Oddity Tech: ~34% Downside Risk As Growth Will Slow Down

I see ~34% downside risk in Oddity Tech stock, reflecting lower peer multiples, heavy insider selling and continued slowdown in the beauty industry

Andrei Zakharov

Oddity Tech Ltd.: Brand Development & Diverse Portfolio Driving Our Optimism! - Major Drivers

ODDITY's Q2 2024 earnings report shows substantial growth and operational efficiency, indicating strong performance and an aggressive growth...

Baptista Research

Oddity Tech Ltd.: Initiation Of Coverage - What Is The Significance of Brand & What Are The Product Range Expansions? - Major Drivers

ODDITY, a data-driven beauty platform, posted strong financial results, reaching two important milestones in 2023: surpassing $500 million in...

Baptista Research

Oddity Tech IPO Valuation Analysis: Growth and Profitability, Solid Upside With Limited Risk

In my insight, I dug deeper into the IPO valuation analysis of Oddity Tech, an Innovative consumer-tech unicorn that wants to disrupt the global...

Andrei Zakharov

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