Some Olaplex Holdings, Inc. (NASDAQ:OLPX) Analysts Just Made A Major Cut To Next Year's Estimates

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One thing we could say about the analysts on Olaplex Holdings, Inc. (NASDAQ:OLPX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from ten analysts covering Olaplex Holdings is for revenues of US$418m in 2025, implying a perceptible 3.7% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to nosedive 25% to US$0.048 in the same period. Previously, the analysts had been modelling revenues of US$475m and earnings per share (EPS) of US$0.099 in 2025. Indeed, we can see that the analysts are a lot more bearish about Olaplex Holdings' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Olaplex Holdings

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NasdaqGS:OLPX Earnings and Revenue Growth November 12th 2024

It'll come as no surprise then, to learn that the analysts have cut their price target 10% to US$2.29.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Olaplex Holdings' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 3.0% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 7.7% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Olaplex Holdings is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Olaplex Holdings. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Olaplex Holdings' revenues are expected to grow slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Olaplex Holdings.

In light of the downgrade, our automated discounted cash flow valuation tool suggests that Olaplex Holdings could now be moderately overvalued. Learn why, and examine the assumptions that underpin our valuation by visiting our free platform here to learn more about our valuation approach.

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