Shares of Oddity Tech Ltd (NASDAQ:ODD) were trading lower on Thursday, after the company reported its third-quarter results on Wednesday.
Although the company’s DTC (direct-to-consumer) wellness and medical-grade skincare brands SpoiledChild and MethodIQ outperformed expectations, issues plaguing the beauty brand Il Makiage “are not yet resolved,” according to Needham.
The Oddity Tech Analyst: Analyst Ryan MacDonald maintained a Hold rating on the stock.
The Oddity Tech Thesis: While the company reported better-than-expected third-quarter results, there is limited visibility into the path towards stabilization at Il Makiage, MacDonald said in the note.
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He highlighted the following from Oddity Tech’s results:
- Revenue declined 2.0% year-on-year to $145.0 million but surpassed consensus of $140.5 million.
- Adjusted EBITDA of $22.0 million came in ahead of Needham’s forecast of $19.0 million.
- Online DTC sales declined 1.2% year-on-year to $138.7 million.
- Other revenue contracted by 15.8% year-on-year and by 3.0% sequentially to $6.3 million.
Management maintained a “cautiously constructive” tone, indicating that 2026 is likely to be “a reset year,” while reiterating their goal of returning to growth across all brands in 2027, the analyst stated.
Disruption to the Il Makiage ad account with the business’s largest advertising partner “remains unresolved,” he noted.
Although the brand achieved the best CPA (cost per acquisition) since 2025 in September, trends softened in October with Oddity continuing to “make large, daily changes to its ad accounts,” MacDonald said.
With strong revenue growth at SpoiledChild and MethodIQ, Oddity guided to a decline of 10%-11%, approximately $135.9-$137.5 million, in its fourth-quarter revenue, the analyst stated.
Management expects 2026 revenues to decline by 18.5% to $660 million, he added.
“With little visibility into the path towards stabilization at Il Makiage, both the rate of growth and margin profile of the overall business remain difficult to forecast in 2027,” MacDonald further wrote.
ODD Price Action: Shares of Oddity Tech had declined by 13.72% to $17.17 at the time of publication on Thursday.
Photo: Volodymyr Maksymchuk via Shutterstock
