This ODDITY Analyst Sees Revenue Growth Of Around 50% in FY23, Upgrades To Buy

Truist Securities analyst Youssef Squali upgraded the rating on ODDITY Tech Ltd ODD to Buy from Hold and maintained a price target of $54.

The analyst is bullish on the company's positive pre-announced Q3 FY23 results.

The company raised the outlook for net revenue growth to 29.0%-31.0% (vs. prior view of 18%-23%) and gross margin of 68.5% (vs. guidance of 67.5%).

Squali believes that the company's valuation fails to account for the company's strong short-term momentum and sees longer-term prospects for top-line growth of 20% and adjusted EBITDA margins of 20%+ in coming years.

In particular, the analyst expects the company to witness revenue growth of 49.7% y/y in FY23, with estimated broader e-Commerce business accelerating in the high single digits in FY23 and low double-digits in FY24.

Squali raised the Q3 estimates for net revenue growth to +29.5% (from +22.6%), gross margin to 68.5% (from 67.5%), and adjusted EBITDA margin to 21.1% (from 20.7%).

For FY23, the analyst increased estimates for net revenue growth to +49.7% (from +48.0% ), gross margin to 69.4% (from 69.3%), and adjusted EBITDA margin to 21.1% (from 21.0%).

Price Action: ODD shares are trading higher at 6.2% to $29.83 on the last check Tuesday.