Olaplex Holdings (OLPX) Stock Forecast & Price Target

Olaplex Holdings Inc. concluded the fourth quarter with $586.0 million in cash and equivalents, reflecting a significant increase from $466.4 million at the end of FY23, which positions the company favorably for future growth. The Specialty Retail channel showed promising year-over-year growth, buoyed by improved sell-through rates and heightened replenishment activities during the holiday season, while DTC sales also rose to 40.6% of overall sales compared to 37.6% the previous year. With the premium haircare market projected to grow at a CAGR of 6%-7% from 2024 through 2028 and Olaplex boasting a top-selling prestige haircare set, the company stands to benefit significantly from these evolving trends and its expanding product portfolio.

Olaplex Holdings Inc. reported a notable decline in net sales of 9.8%, totaling $100.7 million, which primarily stemmed from significant decreases in the professional sales channel, which plummeted 27.1% year-over-year, and a 2.5% decline in direct-to-consumer sales. The company also indicated a substantial contraction in operating margins, dropping approximately 1,250 basis points year-over-year to 17.9%, while it projected a further decrease in FY25 adjusted EBITDA margins to between 20%-22%, significantly below the prior year's margin of 30.7%. As guidance for FY24, Olaplex expects its sales to range from $410 million to $431 million, suggesting stagnation or a potential decline compared to the previous year's $423 million, alongside downward revisions in adjusted EBITDA expectations for the year.