What Happened?
Shares of hair care company Olaplex (NASDAQ: OLPX) fell 19.5% in the morning session after the company reported mixed fourth-quarter results and provided a disappointing full-year revenue forecast.
While the hair care company's fourth-quarter sales rose 4.3% year-over-year to $105.1 million and adjusted earnings per share met expectations, investors focused on the weaker outlook. The company's full-year revenue guidance, at a midpoint of $424.5 million, came in below analysts' estimates. Adding to concerns, the company's profitability declined, with its operating margin falling to negative 4.3% for the quarter, a significant drop from the positive 3% margin in the same period last year. This combination of a disappointing forecast and shrinking profitability appeared to trigger a negative response from investors.
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What Is The Market Telling Us
Olaplex’s shares are extremely volatile and have had 50 moves greater than 5% over the last year. But moves this big are rare even for Olaplex and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 15.4% on the news that Canaccord Genuity upgraded the stock to Buy from Hold and raised its price target to $2.00 from $1.50.
The research firm cited brand reinvigoration and a potential return to growth as key reasons for the more optimistic stance. Canaccord Genuity noted that after a difficult period following its IPO, the prestige beauty brand is finally seeing its sales and margins stabilize. The firm believes that investments in marketing, merchandising, and innovation are beginning to yield positive results. Supporting this view, Olaplex's second-quarter sales showed a return to growth, with analysts seeing the potential for positive sales growth in fiscal year 2025. The company's revenue growth was recorded at 2.25% as of June 30, 2025.
Olaplex is up 5.6% since the beginning of the year, but at $1.43 per share, it is still trading 19.9% below its 52-week high of $1.78 from March 2026. Investors who bought $1,000 worth of Olaplex’s shares at the IPO in September 2021 would now be looking at an investment worth $58.16.
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