What Happened?
Shares of hair care company Olaplex (NASDAQ: OLPX) fell 0.5% in the afternoon session after Telsey Advisory Group maintained its "Market Perform" rating on the stock, while also keeping a price target that suggested significant potential upside. Although the rating did not change, the analyst firm's price target of $2.00 implied a possible 90.48% increase in the stock's value. This detail likely caught the attention of investors. The significant gap between the stock's trading price and the analyst's valuation appeared to be the main driver for the positive move, even without a formal ratings upgrade.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Olaplex? Access our full analysis report here.
What Is The Market Telling Us
Olaplex’s shares are extremely volatile and have had 42 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock gained 22.5% on the news that the company reported fourth-quarter results that significantly exceeded analysts' sales and EPS expectations. Olaplex's operating profit also outperformed Wall Street estimates by a wide margin, and its full-year revenue guidance came in ahead of expectations. On the other hand, sales dropped 9.8%. The sales decline weighed on profitability, with gross profit down 13% and adjusted EBITDA shrinking by more than half. Overall, this was a mixed yet decent quarter.
Olaplex is down 37.6% since the beginning of the year, and at $1.06 per share, it is trading 51.4% below its 52-week high of $2.17 from December 2024. Investors who bought $1,000 worth of Olaplex’s shares at the IPO in September 2021 would now be looking at an investment worth $43.06.
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