Beated guidance again and raised guidance again. Oddity is a predictable cash machine, consistently executing on the plan to become one of the largest beauty companies.
In Q2, Oddity grew revenue 25% YoY to $241 million and generated adjusted EBITDA of $70 million. LTM revenue now stands at $752 million, with $130 million in free cash flow, all while trading at around 30x FCF.
They have gone from pure makeup to skin and hair, and now to medical-grade prescription and OTC products with the upcoming launch of Brand 3, which is a telehealth platform. Just as they unlocked beauty online with IL MAKIAGE and SpoiledChild, they are now turning their sights to healthcare, another huge market where consumers are unhappy and the opportunity is massive. As Oddity adds categories to this new healthcare venture, their TAM will keep growing, building on the $600 billion+ beauty market.
Brand 3 will mark our first entrance into the medical grade space, starting in dermatology and giving our users access to OTC and prescription products. This unlocks an entirely new market for ODDITY
said CEO Oran Holtzman.
Oddity is starting with dermatology and planning expansions to other categories. Dermatology is a smart entry point as many folks are already Oddity users: about 50% of their 60 million-plus users report skin issues like acne, eczema, and dark spots.
Plus, the market fits Oddity’s tech edge.
Our data shows that consumers are unhappy with current solutions. Drug stores offer generalized low-efficacy products that don't solve their issues.
Dermatologists are a tough to access high friction experience. It costs $300 for dermatologist visit before even paying for the treatment itself. And the entire process is inconvenient. Going to dermatologist takes 2 hours of person's time on average. Over 2/3 of Americans counties don't have a practicing dermatologists at all.
A key bet is personalization as a big edge over rivals. They’ve built 20-plus user cohorts with unique treatment plans, on the base of their user data.
These customized offerings show a 50% improvement in the amount of satisfied testers compared to tretinoin alone based on internal work we have done,
Holtzman noted.
E.g. for acne, it’s a full loop. First, the products match unique needs—like mild breakouts versus deep cystic ones, hormonal flares, or back acne. Then, the online setup pairs computer-vision tech with doctor protocols for tailored, effective treatments. Finally, coaching via a mobile app keeps users on track with personalized tips, photo monitoring, and adjustments as skin improves.
As Holtzman put it:
Our goal is to help users solve their medical problems with minimal hassle and treatment iterations. Diagnosis, treatment matching and tracking all online without going to a doctor’s office and pharmacy.
The topper is ODDITY Labs, starting to bear fruit after years of work. They aim to make the world’s most effective products by scaling real science in beauty—discovering breakthrough molecules, ingredients, and delivery systems. They have proprietary molecules ready for Brands 3 and 4 soon, plus long-term ones with huge upside.
This closes the flywheel: Oddity gathers user data through its direct-to-consumer model, spots specific needs, creates superior products for cohorts that beat generic rivals, gets more feedback, and keeps improving. A self-reinforcing cycle that runs forever.
Why the market is wrong
When I share about Oddity on X or here, folks still call it a scam.
Paired with the cheap valuation, it feels like the 2024 short report lingers as truth for many.
Short seller Ningi Research claimed Oddity hid over 40 physical Il Makiage stores in Israel—against its online-only story—while faking sales via tricky subscriptions that force unwanted repeats.
Oddity hit back: “full of factual inaccuracies, incorrect assumptions, and malicious speculation.” Key facts: Israeli stores under 5% of revenue (disclosed and audited); “hundreds” of lawsuits are small Israeli claims; AI tech powers real profits; 4-5 star reviews rule, complaints under 0.1% of sales.
Over a year later, Oddity's financials speak for themselves.
Like the graphs and my analysis? Check out my “Tools I Trust” page to see what I use—and grab 'em via my links to support my work!
Faked results? Trick balance sheet and statements? Come on.
Sure, CEO Oran Holtzman isn’t the chatty type who charms on TV. He’s private, shares little to keep an edge over rivals. But what about CFO Lindsay Drucker Mann, hired in 2021? After 16 years as a Goldman Sachs managing director in tech and consumer equity capital markets, why toss her career for a fraud?
Here’s Mann on the call, laying out how they’ll deliver steady growth:
We constrain all the time. We have the ability to grow faster than the actual numbers that we deliver. And our approach is to make sure that every single year, we can compound at 20% revenue growth with 20% adjusted EBITDA margins for many, many years to come as opposed to pulling any of that growth forward when we don’t need it. So the right way to think about your models as you build in the out year is that we will have many, many levers of growth. We’ll consistently deliver on that algorithm and that you can feel confident in our ability to sustain that growth and compound in the future.
Conclusion
Oddity is an asymmetric bet, plain and simple.
Even at a modest 20-22% YoY growth—aligned with the low end of Oran’s long-term goal—the fair value is still about 2x today’s price.
And that skips revenues from Brand 3 and Brand 4, which could turn material by late 2026, pushing growth over 25% YoY—like what they’ve done so far with just two brands.
Fraud odds? Very low in my opinion. They’ve proven the model works, products ship, and customers love them—Trustpilot scores 4.1 for both IL MAKIAGE and SpoiledChild, made by 88,000+ reviews in total.
Oran’s vision rolls out quarter by quarter, matching the numbers. It points to Brand 3 as another hit, like IL MAKIAGE and SpoiledChild.
As always, here is the “Deep Dive To Date” (DDTD), that is how the stock is performing since my initial deep dive on the July 16th 2024, when the price was $44.24.
+42% DDTDSee you in the next update!
The content of this analysis is for entertainment and informational purposes only and should not be considered financial or investment advice. Please conduct your own thorough research and due diligence before making any investment decisions and consult with a professional if needed.
Nice write up. Been in this one since last year. Remains under the radar it seems. Still pretty high short interest