Beauty-Tech Disruptor Oddity Tech Shows Strong Fundamentals Despite Stock Market Indifference

The Growth Story Nobody’s Talking About

Oddity Tech (NASDAQ: ODD) presents an intriguing disconnect: while the company’s financial metrics point to a thriving business, its share price has largely flat-lined since the 2023 IPO. This gap between business performance and shareholder returns raises a critical question—is the market undervaluing this AI-powered cosmetics platform?

The numbers tell a compelling story. Through the first nine months of 2025, Oddity generated $90 million in free cash flow while maintaining accelerating profitability metrics. Third-quarter results showed 24% year-over-year revenue growth alongside 25% gains in adjusted earnings, reaching $0.40 per share. Yet these improvements haven’t sparked investor enthusiasm, suggesting either market skepticism or a genuine mismatch between valuation and fundamentals.

How the Pre-IPO Momentum Built

Before going public, Oddity had already caught Wall Street’s attention with exceptional growth patterns. Between 2020 and 2021, the company achieved revenue doubling while maintaining profitability under standard accounting principles—a rarity for emerging tech ventures. The trajectory accelerated in 2022, with 46% revenue expansion and net income surging over 50%.

This momentum carried into its June 2023 IPO pricing at $35 per share. Investors rushed in, pushing the stock above $47.50 on day one and helping Oddity and its private equity backers raise approximately $425 million. The market seemed convinced the company had unlocked something special in beauty-tech.

Where the Growth Actually Stands Now

Post-IPO growth rates have evolved rather than collapsed. After the company accelerated to 57% revenue growth in 2023—exceeding its 2022 pace—sales gains moderated to 27% in 2024. This slowdown is completely normal for an expanding technology platform, yet growth stock investors began questioning the sustainability of the AI beauty company’s trajectory.

The real story lies in what’s happening at the profit line. Despite larger scale, Oddity Tech expanded its operating margin from 8.5% to 14.6%, with net income nearly tripling to $58.5 million in 2023. This margin expansion reveals disciplined capital allocation—the company is channeling efficiency gains into R&D and market expansion rather than simply protecting bottom-line percentages.

The 2025 Inflection and Market Hesitation

Early 2025 saw the stock price nearly double as AI enthusiasm peaked. But as the company outlined more aggressive digital marketing investments and signaled the reality of moderating growth rates, sentiment cooled. The market’s reaction betrayed impatience with a company that’s still growing 24-25% annually while maintaining healthy profitability margins.

Looking ahead to 2026, Oddity expects net revenue to exceed $800 million, representing 24-25% growth from 2024 levels, with adjusted earnings guidance of $2.10 to $2.12 per share. These aren’t numbers of a company running out of runway; they’re metrics of a business entering its next growth phase.

The Valuation Puzzle

The fundamental question facing investors is whether Oddity Tech deserves its current valuation given its financial trajectory. The company operates in the global beauty and wellness sector—a market where technology-driven personalization and AI-powered recommendations create defensible competitive advantages. With consistent margin expansion and strong cash generation, the business case appears solid.

Whether the stock follows its earnings remains an open question, but history suggests that over longer time horizons, share prices eventually align with fundamental performance. The gap between Oddity’s business growth and its stock performance may not persist indefinitely.