Olaplex Holdings, Inc. Just Beat EPS By 15%: Here's What Analysts Think Will Happen Next
Shareholders might have noticed that Olaplex Holdings, Inc. (NASDAQ:OLPX) filed its annual result this time last week. The early response was not positive, with shares down 7.1% to US$1.82 in the past week. Revenues were US$458m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.09 were also better than expected, beating analyst predictions by 15%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Olaplex Holdings
Taking into account the latest results, Olaplex Holdings' eight analysts currently expect revenues in 2024 to be US$452.9m, approximately in line with the last 12 months. Statutory earnings per share are forecast to drop 18% to US$0.077 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$481.0m and earnings per share (EPS) of US$0.098 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.
The consensus price target fell 16% to US$2.61, with the weaker earnings outlook clearly leading valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Olaplex Holdings analyst has a price target of US$7.50 per share, while the most pessimistic values it at US$1.25. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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.
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 revenue is expected to reverse, with a forecast 1.2% annualised decline to the end of 2024. That is a notable change from historical growth of 10% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.4% annually for the foreseeable future. It's pretty clear that Olaplex Holdings' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Olaplex Holdings going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Olaplex Holdings .
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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.
