What Happened?

Shares of hair care company Olaplex (NASDAQ:OLPX) jumped 22.5% in the afternoon session after the company reported fourth-quarter results that significantly exceeded analysts' sales and EPS expectations. Olaplex's operating profit also outperformed Wall Street estimates by a wide margin, and its full-year revenue guidance came in ahead of expectations. On the other hand, sales dropped 9.8%. The sales decline weighed on profitability, with gross profit down 13% and adjusted EBITDA shrinking by more than half. Overall, this was a mixed yet decent quarter.

After the initial pop the shares cooled down and closed the day at $1.68, up 22.3% from previous close.

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What The Market Is Telling Us

Olaplex’s shares are extremely volatile and have had 62 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 11 months ago when the stock dropped 7.9% after the company announced that CFO (Chief Financial Officer) Eric Tiziani would step down to pursue other opportunities. According to the release, the company will continue the search for a new CFO. Paul Kosturos, a Managing Director at Alvarez & Marsal, is expected to serve as internal Interim CFO. In addition, Olaplex reaffirmed revenue guidance for the first quarter of 2024.

Olaplex is down 4.1% since the beginning of the year, and at $1.62 per share, it is trading 38.1% below its 52-week high of $2.62 from September 2024. Investors who bought $1,000 worth of Olaplex’s shares at the IPO in September 2021 would now be looking at an investment worth $66.18.

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