We came across a bullish thesis on Oddity Tech Ltd. (ODD) on Substack by Lorenzo Bastianelli. In this article, we will summarize the bulls’ thesis on ODD. Oddity Tech Ltd. (ODD)'s share was trading at $44.05 as of March 6^th. ODD’s trailing P/E was 26.84 according to Yahoo Finance.

A close up of a customer browsing a selection of beauty and personal care products online.

Oddity Tech continues to exceed expectations, reporting $123.6 million in revenue for the quarter, marking a 27% year-over-year (YoY) increase. This outpaces the company's long-term growth target of 20% and reinforces the management’s pattern of under-promising and over-delivering. Notably, Oddity achieved a gross margin of 72.7%, its highest since 2020, reflecting strong brand equity, premium pricing power, and an improving margin profile that is narrowing the gap with industry leaders like L’Oréal. These results signal sustained momentum as Oddity strategically expands its portfolio and leverages its direct-to-consumer model.

For FY2025, Oddity has guided revenue between $776 million and $785 million, representing 20%-21% YoY growth. However, management’s commentary suggests this estimate may be conservative. CEO Oran Holtzman outlined IL MAKIAGE’s trajectory toward $1 billion in revenue by 2028, implying a compound annual growth rate (CAGR) of 19%, with near-term growth likely exceeding 20%. Similarly, SpoiledChild, still in an earlier growth phase, is expected to scale at an even faster rate, backed by strong repeat purchases and a high average order value. The company is also set to introduce a third brand in FY2025, which, though initially contributing modestly, adds another growth lever. Given these factors, Oddity’s actual revenue growth could land between 22% and 27%, surpassing guidance if macroeconomic conditions remain stable.

A major growth driver is international expansion, which has been a relatively untapped opportunity. Oddity has begun ramping up in existing markets like the U.K., Germany, and Australia, while testing new geographies. Early signs are positive, reinforcing management’s belief that international revenue can scale significantly over time. Additionally, rising repeat purchases and increasing customer lifetime value indicate that Oddity’s brands are successfully deepening relationships with their consumer base.

Despite the strong financial performance, one concerning metric is organic website traffic, which has been flat to declining YoY for both IL MAKIAGE and SpoiledChild. This suggests that while the company is excelling at engaging existing customers—evidenced by higher order values and strong retention—it is not significantly expanding its new customer base through word-of-mouth at the expected pace. This divergence between revenue growth and organic traffic warrants further scrutiny, as sustained growth will require continued customer acquisition alongside increased spending from loyal customers.

Overall, Oddity Tech presents a compelling investment case. The company’s track record of exceeding guidance, high-margin business model, and multiple growth catalysts—including brand expansion, international penetration, and deepening customer engagement—position it for long-term success. While organic traffic trends merit close monitoring, the company’s ability to drive revenue through increasing customer spend and retention mitigates near-term concerns. If Oddity continues executing at this level, it is well-positioned to sustain its strong growth trajectory and further solidify its leadership in the beauty-tech space.

Oddity Tech Ltd. (ODD) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held ODD at the end of the third quarter which was 18 in the previous quarter. While we acknowledge the risk and potential of ODD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ODD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.