Olaplex stock surges 12% after first Wall Street buy rating

Olaplex shares rose 12% after Canaccord Genuity upgraded the haircare brand from Hold to Buy, citing a "brand reinvigoration" and stabilized sales around $400 million. The analyst noted positive Q2 sales growth and potential annual growth in fiscal 2025, but emphasized that Olaplex is not yet fixed.

Olaplex shares surged 12% on Monday after Canaccord Genuity upgraded the haircare brand from Hold to Buy, citing a "brand reinvigoration" and stabilized sales around $400 million. The analyst noted positive Q2 sales growth and potential annual growth in fiscal 2025, but emphasized that Olaplex is not yet fixed.

Canaccord Genuity analyst Susan Anderson cited a "brand reinvigoration" at Olaplex, suggesting the company is "ready to shine as a highly profitable prestige beauty brand set to return to growth." She highlighted the company’s journey since its IPO, which saw sales initially grow at triple-digit rates to over $700 million annualized before normalizing to its current $400+ million run rate.

The analyst noted that after 2.5 years of normalization, Olaplex is finally seeing sales and margins stabilize. The company reported sales growth in the second quarter and could potentially return to positive annual growth in fiscal year 2025. Meanwhile, adjusted EBITDA margins are settling at industry-standard low-20% rates, down from previous levels exceeding 60%.

Olaplex’s stock movement reflects growing confidence that investments in marketing, merchandising, and innovation are beginning to yield results for the hair care brand. Despite the upgrade, the company is still facing margin pressure and has not yet fully recovered from its rollercoaster journey since its IPO.

In other recent news, Olaplex Holdings Inc. reported its second-quarter 2025 financial results, highlighting a mixed performance. The company reported a revenue of $106.3 million, which surpassed analysts’ expectations of $100.64 million, marking a 5.6% beat. This revenue increase of 2.3% year-over-year is notable as it represents the first positive sales growth for Olaplex in nine quarters. However, the earnings per share (EPS) fell short, coming in at -$0.0048 against the forecasted $0.0128, a surprise of -137.5%.

Canaccord Genuity responded to these results by lowering Olaplex’s stock price target from $2.00 to $1.50, citing margin pressure, but maintained a Hold rating on the stock. This adjustment reflects the company’s ongoing challenges despite exceeding sales expectations. These developments are important for investors to consider as they evaluate Olaplex’s financial health and market position.

References:
[1] https://www.investing.com/news/analyst-ratings/canaccord-genuity-upgrades-olaplex-stock-to-buy-on-brand-reinvigoration-93CH-4208138
[2] https://ca.investing.com/news/stock-market-news/olaplex-stock-jumps-after-receiving-first-buy-rating-from-wall-street-93CH-4175361
[3] https://www.investing.com/news/analyst-ratings/olaplex-stock-steady-as-raymond-james-reiterates-market-perform-rating-93CH-4211414