Pitch: DTC haircare brand in hyper-growth mode (+112% in ’21 and exp. +34% in ’22), yet trading below more stagnant and far larger peers. 80% GM and 60%+ EBITDA margins mainly due to reliance on social media rather than paid media. Market concerns over the durability of growth and sustainability of high margins are driving comparably lower valuation – the author believes both are sustainable. Stock is down 50% since its IPO in Fall’21.
Valuation: OLPX trades at low-20x NTM PE with best-in-class margins and growth vs peers EL, OR.PA at >30x NTM P/E with HSD growth. Projected $1 EPS for ’24 vs $0.4 for ’21.
Exp. gain: +100% to $29 by 2023
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