Olaplex Holdings, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

The analysts might have been a bit too bullish on Olaplex Holdings, Inc. (NASDAQ:OLPX), given that the company fell short of expectations when it released its third-quarter results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at US$119m, statutory earnings missed forecasts by an incredible 25%, coming in at just US$0.02 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Olaplex Holdings

Taking into account the latest results, the most recent consensus for Olaplex Holdings from nine analysts is for revenues of US$446.3m in 2025. If met, it would imply a modest 2.9% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 56% to US$0.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$475.4m and earnings per share (EPS) of US$0.099 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

It will come as no surprise then, that the consensus price target fell 5.4% to US$2.42following these changes. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Olaplex Holdings at US$5.00 per share, while the most bearish prices it at US$1.50. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Olaplex Holdings' revenue growth is expected to slow, with the forecast 2.3% annualised growth rate until the end of 2025 being well below the historical 7.7% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.9% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Olaplex Holdings.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Olaplex Holdings' future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Olaplex Holdings going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Olaplex Holdings that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.