Aiming to transform the global beauty and wellness industry with its consumer technology platform, Israel-based Oddity Tech has already made its mark on the IPO Leaders list. Weathering patchy blemishes in its chart, Oddity stock has flashed multiple buy points since last month as it teases yet another — if the market would cooperate.
Oddity Tech also earns a spot on the IBD Breakout Stocks Index alongside tech titans like Broadcom, ServiceNow, Salesforce and 2022 IPO Credo Technology.
Oddity Stock: AI Firm In Demand
The company builds digital-first brands with artificial intelligence, molecular discovery, computer vision and a data science-based online platform. According to the company, it has attracted more than 40 million users into its ecosystem.
Calling its brands "unconventional" and "unconstrained," Oddity uses technology to shift offline customers of cosmetics and beauty care products to an AI-enabled online browsing and buying experience. The company's Il Makiage and SpoiledChild brands tap into a proprietary machine-learning algorithm to help match users to their perfect products based on their unique individual profile.
Oddity stock tops the Cosmetics/Personal Care industry group, sporting a 94 Composite Rating. That means it is outpacing 94% of all stocks in Investor's Business Daily's database in terms of the most critical stock-picking factors.
Signs of demand for Oddity stock include a B Accumulation/Distribution Rating, which ties that of fellow AI stock Salesforce. Broadcom(A-) and ServiceNow (B+) sport higher grades.
Also note that five funds with an A+ rating from Investor's Business Daily have a position in Oddity stock.
Who Joins Oddity Tech, ServiceNow, Broadcom On The IBD Breakout Stocks Index?
Spotlight On Growth
In IBD Stock Checkup, Oddity Tech earns strong marks across the board for quarterly and annual earnings growth, as well as for sales performance.
Boosted by a 20.3% annual pretax profit margin and 40.2% annual return on equity, the AI-fueled cosmetics company scores an A in its SMR Rating. It boasts an average annual sales growth rate of 48% over the last three years. In the third quarter, Oddity Tech generated a 26% year-over-year gain to $119 million.
Bottom-line gains also have been strong and steady, averaging 104% over the last three years. But signs of a slowdown have emerged. After posting 52% earnings growth to 32 cents per share in the third quarter, analysts forecast a 38% rise to 11 cents in the fourth quarter.
For the full year, Wall Street expects Oddity Tech to deliver a 38% earnings gain to $1.81 per share
Oddity Stock Teases Breakout
Following a sharp drop starting just a month after its August 2023 initial public offering, Oddity Tech bottomed out in November of that year. But the road to a rebound was a bumpy one. Showing the volatility that IPOs often experience, Oddity stock continued to weather choppy action through November 2024.
On Nov. 25, Oddity Tech cleared a 47.08 handle buy point in a first-stage saucer pattern. That bounce came after the stock had found support at its 50-day moving average.
Oddity Tech went on to form what could be viewed as another handle with a 48.15 buy point. Showing how stock charts can offer multiple interpretations and buy points, Oddity has crafted yet another possible entry.
Oddity stock continued to tease a 50.36 buy point in this evolving consolidation pattern until the Nasdaq sold off sharply on Wednesday. Oddity also pulled back. Like the Nasdaq, Oddity closed the session clinging to its 21-day line.
In a sign of market leadership, its relative strength line had climbed to right around its 52-week high before dipping on Wednesday. Look for the RS line to perk up as we head into the holiday season.
Meanwhile, fellow AI-driven IBD Breakout Stocks Index members ServiceNow and Salesforce pulled back Wednesday after notching record highs earlier this month. Boosted by a massive AI chip opportunity, Broadcom blasted out to an all-time high this week before retreating amid market pressure.
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
