Is Olaplex's Recent Volatility a Buying Opportunity or a Warning Sign?

The stock of Olaplex Holdings (OLPX) has been a rollercoaster for investors in late 2025, with sharp price swings and conflicting signals from technical and fundamental analyses. As the beauty brand grapples with declining revenue and earnings, the question looms: Is this volatility a technical correction masking a resilient business, or a warning sign of deeper fundamental deterioration? Let's dissect the data to determine whether OLPX is a distressed brand or a mispriced gem.

Technical Indicators: A Mixed Bag of Signals

From a technical perspective, OLPX's recent performance is a patchwork of conflicting signals. The stock closed December 8, 2025, at $1.22, down 2.40% from its previous close, with intraday volatility hitting 4.96% between $1.21 and $1.27 according to technical analysis. While the 14-day RSI of 55.266 and the 50-day/200-day moving averages suggest buy signals, a pivot top formed on December 5 and a bearish 5-day moving average counterbalance this optimism according to technical indicators.

A critical technical level to watch is $1.24, where a breakout could signal a slowdown in downward momentum according to technical analysis. However, the stock remains in the upper part of a falling trend channel, with support levels at $1.18 and $1.10 acting as potential sell triggers if breached according to technical analysis. Analysts have flagged a stop-loss at $1.17, a 4.39% drop from the closing price, to mitigate risk amid low liquidity and declining volume according to technical analysis. Meanwhile, a double bottom formation in November 2025 has sparked cautious optimism, with some technicians projecting a rebound to $1.28 or higher if the $1.15 resistance is cleared according to market analysis.

Fundamental Deterioration: Revenue and EPS Concerns

While technical indicators offer a glimmer of hope, the fundamentals tell a grimmer story. Olaplex's Q3 2025 results revealed a 3.8% year-over-year revenue decline to $114.6 million, though it narrowly exceeded expectations according to earnings reports. More troubling was the EPS miss of $0.02 (vs. $0.0244 estimated) and Q2's even sharper shortfall of -$0.0048 against an expected $0.0128 according to earnings data. For Q4 2025, Wall Street anticipates a 21.6% revenue drop to $87.6 million and a break-even EPS, signaling continued pressure according to earnings forecasts.

These trends underscore a broader narrative of operational strain. Despite strategic initiatives in product innovation and international expansion, the company's ability to reverse its earnings trajectory remains unproven. Analysts have slightly raised the fair value estimate to $1.89 per share according to financial analysis, but the stock remains 47.6% below this benchmark according to market data, raising questions about whether the discount reflects undervaluation or a lack of confidence in management's turnaround plans.

Analyst Sentiment: Cautious Optimism Amid Uncertainty

The analyst community is split. Barclays maintains an equal-weight rating with a $1.25 price target according to analyst ratings, while Canaccord Genuity upgraded OLPX to "Buy" with a $2.00 target, citing optimism about the brand's revival according to analyst reports. However, these bullish views contrast with the broader consensus of "Hold," as mixed earnings results and weak guidance temper enthusiasm according to market consensus.

The recent price action-such as the pre-market rally following Q2 and Q3 reports-suggests some market overreaction to incremental positives according to market analysis. Yet, with volume patterns showing a negative correlation between price and volume, the technical underpinnings of this optimism appear fragile according to technical analysis.

### Is This a Distressed Brand or a Mispriced Gem?

The key to answering this lies in reconciling the technical and fundamental narratives. On one hand, OLPX's undervaluation (47.6% below fair value) and potential technical corrections-like the double bottom-hint at a mispriced gem. On the other, declining revenue, EPS misses, and a projected Q4 slump point to a distressed brand struggling to adapt.

For investors, the path forward hinges on risk tolerance. A breakout above $1.24 could validate the technical case for a rebound, but a breakdown below $1.18 would likely accelerate the decline toward the $0.714–$0.95 range projected over the next three months according to technical analysis. Given the mixed signals, a "Hold" strategy seems prudent, with a focus on monitoring Q4 earnings and whether the company can stabilize its core business.

Conclusion: Proceed with Caution

Olaplex's recent volatility encapsulates the tension between technical optimism and fundamental pessimism. While the stock's discounted valuation and potential for a short-term bounce are tempting, the deteriorating earnings and revenue trends cannot be ignored. Investors should treat OLPX as a high-risk, high-reward proposition-worthy of a watchlist but not a buy list-until clearer evidence of a turnaround emerges.