International Expansion And New Vertical Launches Will Expand Addressable Market

Key Takeaways

• Early-stage international growth and expansion into new healthcare verticals offer significant potential to increase market reach and diversify revenue sources.
  
• Advanced AI-driven personalization, strong proprietary technology, and robust financial flexibility position the company for sustained growth and strong profitability.
  
• Heavy reliance on digital growth and proprietary tech, coupled with aggressive expansion and investment, exposes Oddity to risks from rising costs, competition, and slower returns.

Catalysts

Operates as a consumer tech company that builds digital-first brands for the beauty and wellness industries in the United States and internationally.

• Oddity's ongoing international expansion, with significant strengthening in existing and prospective new markets (e.g., France, Italy, Spain), is at a very early stage relative to peers but already generating >40% Y/Y growth and providing a long runway for revenue growth as it closes the gap with competitors whose businesses are 70% international (vs. 15% for Oddity); this should materially increase total addressable market and revenue in future periods.
  
• Upcoming new market launches in medical-grade dermatology and telehealth with Brand 3-leveraging Oddity's large, data-rich user base, AI-driven personalization, and proprietary molecules-introduce an entirely new vertical and customer segment, likely providing incremental and diversified revenue streams that are not factored into near-term outlooks.
  
• Increased consumer comfort with digital-first buying and Oddity's advanced AI/data infrastructure enables more effective personalization and high repeat rates, directly improving conversion and customer lifetime value, which supports gross margin resilience and long-term earnings power.
  
• Sustained investment in proprietary technology platforms (e.g., ODDITY Labs, computer-vision tech, mobile app-based compliance/tracking) is establishing strong barriers to entry and positioning Oddity to lead in breakthrough product innovation, facilitating higher operating leverage and expanding net margins as scale increases.
  
• The business model's strong free cash flow conversion (80%+ of EBITDA), combined with opportunistic buyback capacity and significant balance sheet cash, provides optionality for future growth investments, M&A, or shareholder returns, potentially supporting both EPS and valuation multiples over time.

Oddity Tech Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Oddity Tech's revenue will grow by 19.0% annually over the next 3 years.
• Analysts assume that profit margins will increase from 14.6% today to 32.5% in 3 years time.
• Analysts expect earnings to reach $412.1 million (and earnings per share of $5.36) by about August 2028, up from $110.1 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 12.2x on those 2028 earnings, down from 29.4x today. This future PE is lower than the current PE for the US Personal Products industry at 21.0x.
• Analysts expect the number of shares outstanding to decline by 1.83% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.51%, as per the Simply Wall St company report.

Oddity Tech Future Earnings Per Share Growth

Risks

• Oddity Tech remains heavily reliant on digital customer acquisition and online marketing, particularly as it launches new brands and expands internationally. Rising customer acquisition costs, digital ad fatigue, and intensifying competition for online attention may compress net margins and slow top-line revenue growth over the long term.
  
• The company's rapid international expansion lags major beauty competitors (who derive ~70% of revenue internationally vs. Oddity's 15%), and while management is optimistic, slower-than-expected penetration or execution missteps in new markets could hinder revenue growth and limit earnings diversification relative to global peers.
  
• Oddity's long-term roadmap depends on the sustained success and continued differentiation of its proprietary AI-powered personalization and recommendation engines. Technological obsolescence, increased regulatory scrutiny over data privacy/AI, or competitors successfully replicating or surpassing these capabilities could erode Oddity's competitive advantage and negatively impact revenue and customer retention.
  
• The shift towards omnichannel retail in the beauty and healthcare sectors-where physical and digital channels are integrated-may disadvantage Oddity's primarily online, DTC-first model by limiting its addressable market and future revenue growth, especially as larger incumbents innovate across both digital and physical retail.
  
• Planned heavy investments in new brands (e.g., Brand 3, Brand 4) and ODDITY Labs, along with margin compression from front-loaded spending, introduce significant execution risk. If these investments do not yield expected scale or ROI, or if launches underperform relative to expectations, future earnings and net margins could be pressured for an extended period.

Valuation

• The analysts have a consensus price target of $73.333 for Oddity Tech based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $90.0, and the most bearish reporting a price target of just $55.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.3 billion, earnings will come to $412.1 million, and it would be trading on a PE ratio of 12.2x, assuming you use a discount rate of 9.5%.
  
• Given the current share price of $57.97, the analyst price target of $73.33 is 20.9% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.