AI Driven Retail Trends Will Unlock Global Markets

Key Takeaways

• AI-based personalization and rapid innovation are expected to drive superior customer loyalty, enabling industry-leading retention and stronger revenue and margin performance.
  
• Expansion into telehealth, e-commerce, and new high-value brands opens recurring revenue streams and accelerates market share and earnings growth over time.
  
• Regulatory, economic, trust, and brand concentration risks threaten Oddity Tech's revenue growth, marketing effectiveness, and long-term profitability in the increasingly competitive digital beauty sector.

Catalysts

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

• Analyst consensus expects Oddity's AI-driven personalization and science-backed R&D to drive solid product innovation and customer loyalty, but sustained step-changes in user satisfaction and repeat rates from these investments could lead to industry-leading customer retention and much higher lifetime value, supporting both revenue outperformance and durable net margin expansion.
  
• While the market expects international growth to mirror competitors, there is potential for Oddity's proven digital-first model and superior consumer data to catalyze a faster-than-expected global revenue mix shift, potentially doubling international topline in a much shorter timeframe and significantly lifting total revenue and unit economics.
  
• Oddity's transition into telehealth and medical-grade online treatments positions it to capture share not just from traditional beauty but also from a vast, supply-constrained healthcare market, unlocking entirely new recurring revenue streams and the potential for high-margin subscription models.
  
• The explosion of e-commerce and the normalization of buying even regulated health products online globally create a fertile environment for rapid scaling of new high-value platforms like Brand 3 and Brand 4, structurally boosting long-term revenue growth and margin leverage as fixed tech infrastructure costs are spread across more transactions.
  
• Oddity's deep proprietary user data and rapid iteration culture offer a unique feedback loop advantage, allowing markedly faster launches and refinement of new categories and brands than peers, which can result in a virtuous cycle of compounding earnings growth and share gains over multiple years.

Oddity Tech Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Oddity Tech compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Oddity Tech's revenue will grow by 18.9% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 14.6% today to 37.9% in 3 years time.
• The bullish analysts expect earnings to reach $479.4 million (and earnings per share of $2.92) by about August 2028, up from $110.1 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 12.8x on those 2028 earnings, down from 29.3x today. This future PE is lower than the current PE for the US Personal Products industry at 23.4x.
• 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 9.52%, as per the Simply Wall St company report.

Oddity Tech Future Earnings Per Share Growth

Risks

• Heightened global data privacy regulations such as GDPR and CCPA could restrict Oddity Tech's personalized AI-driven approach and increase compliance costs, limiting user data collection and targeting-this could reduce user growth and marketing effectiveness in ways that negatively impact revenue and profitability over time.
  
• Intensifying consumer scrutiny of artificial intelligence and algorithmic bias could erode trust in Oddity Tech's personalized beauty recommendations, lowering conversion rates and customer retention, which would impair long-term revenue growth and earnings consistency.
  
• Persistent economic pressures and rising income inequality could stifle global consumer discretionary spending, narrowing the addressable market for non-essential beauty and personal care, which would weigh on Oddity's topline revenue growth despite strong product launches.
  
• Oddity Tech's ongoing high customer acquisition costs and dependence on paid digital marketing could lead to compressed net margins as competition grows in the digital beauty sector, particularly if acquisition costs rise faster than contribution and repeat rates.
  
• The company's reliance on a limited number of flagship brands-specifically IL MAKIAGE and SpoiledChild-exposes it to brand concentration risk; any misstep, loss of relevance, or negative publicity in these core brands would have an outsized adverse effect on overall company revenue and earnings.

Valuation

• The assumed bullish price target for Oddity Tech is $90.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Oddity Tech's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• 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 bullish analysts, you'd need to believe that by 2028, revenues will be $1.3 billion, earnings will come to $479.4 million, and it would be trading on a PE ratio of 12.8x, assuming you use a discount rate of 9.5%.
  
• Given the current share price of $57.74, the bullish analyst price target of $90.0 is 35.8% 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.