Truist Securities reiterates Buy rating on Oddity Tech stock, citing growth momentum

Truist Securities reiterated its Buy rating and $78 price target for Oddity Tech Ltd (NASDAQ:ODD), expressing increased confidence in the company's ability to maintain its '20/20 algo' (20% revenue growth, 20% profit margins) for several years. This positive outlook is underpinned by strong Q2 2025 earnings that surpassed expectations, robust 26.12% revenue growth, industry-leading 72.93% gross margins, sustained momentum in existing brands, and future growth drivers including new brand launches like Methodiq in Q4 2025 and international expansion, supported by a strong balance sheet and healthy free cash flow.

Analysis

Truist Securities has reiterated its Buy rating on Oddity Tech Ltd (ODD) with a $78.00 price target, signaling strong conviction following a meeting with the company's CFO. This outlook is anchored by increased confidence in management's ability to sustain its '20/20 algo'—a model targeting 20% revenue growth and 20% profit margins. The company's recent performance provides tangible support for this thesis, having already posted revenue growth of 26.12% and industry-leading gross margins of 72.93%. Furthermore, Oddity Tech delivered a better-than-expected second quarter for 2025, with earnings per share of $0.92 surpassing the $0.84 forecast on revenue of $241 million, which also slightly exceeded estimates. Growth is propelled by sustained momentum in its core IL Makiage and SpoiledChild brands, which Truist's Card Data analysis indicates is continuing into Q3 2025. The forward-looking growth pipeline appears robust, with the launch of a third brand, 'Methodiq', planned for Q4 2025 and a fourth brand scheduled for 2026, alongside international expansion opportunities. The company's strong balance sheet, healthy free cash flow, and manageable tariff exposure provide the financial flexibility to fund these growth initiatives and enhance shareholder value.

Key Decisions for Investors

• Investors should view the reiterated Buy rating and $78 price target as a strong institutional validation of Oddity Tech's growth strategy and execution capabilities, particularly its ability to exceed its '20/20' financial targets.
• The upcoming launch of the 'Methodiq' brand in Q4 2025 represents a key near-term catalyst, and its market reception should be monitored closely as it is expected to begin contributing to financials in fiscal year 2026.
• Given the company's strong free cash flow generation and a clear roadmap for product and international expansion, investors may consider the current share price an attractive entry point, while remaining mindful of execution risks associated with new brand launches.