Beauty-Tech Disruptor Oddity Tech Shows Momentum Despite Market Skepticism

When Oddity Tech debuted on NASDAQ under the ticker ODD in 2023, few expected the company would become a case study in the disconnect between business fundamentals and share performance. Yet that’s precisely what happened to this AI-powered cosmetics and wellness platform.

Strong Earnings Mask Volatile Share Activity

The most telling indicator of Oddity’s business health came in the company’s Q3 2025 results. Third-quarter revenues expanded 24% year-over-year, while adjusted earnings grew to $0.40 per share—representing a 25% increase. These outcomes exceeded management’s prior guidance and prompted the company to raise its full-year 2025 expectations to approximately $800 million in net revenue, translating to roughly 24-25% growth compared to 2024.

Despite these encouraging metrics, Oddity’s shares have experienced considerable turbulence. Early 2025 witnessed near-doubling in the stock price amid enthusiasm around artificial intelligence investments. However, subsequent weakness emerged as investors reassessed the company’s spending plans—particularly increased capital allocation toward digital marketing and expanded AI capabilities development.

The free cash flow generation tells another story. Through the first nine months of 2025, Oddity generated $90 million in free cash flow, demonstrating the business continues to convert sales into actual capital. This ability to grow share returns through operational efficiency remains a competitive advantage in the crowded beauty-tech sector.

The Pre-IPO Trajectory That Built Expectations

Understanding where Oddity stands requires examining its evolution. Prior to the 2023 public offering, the company had already demonstrated exceptional discipline. Between 2020 and 2021, Oddity doubled its revenue while maintaining profitability under generally accepted accounting principles—unusual for early-stage technology firms.

By 2022, the momentum accelerated dramatically. Sales climbed 46% and net income surged more than 50%, creating substantial investor enthusiasm heading into the IPO. When the company offered shares at $35, demand pushed the opening trade above $47.50, ultimately raising approximately $425 million.

The Post-IPO Expansion and Market Disconnect

Following its market debut, Oddity refused to decelerate. In 2023, revenue growth actually accelerated to 57% compared to the prior year’s 46%. More impressively, management’s emphasis on profitability drove operating margins from 8.5% to 14.6%. Net income nearly tripled to $58.5 million.

Yet the market’s reaction proved oddly indifferent. Despite accelerating growth and dramatically improving profitability metrics, shares delivered lackluster returns through 2023 and 2024. As growth rates naturally moderated to 27% in 2024—a consequence of the company’s expanding scale—growth-focused investors became increasingly skeptical about long-term prospects.

The AI Factor and Forward Outlook

Looking ahead, Oddity faces predictable challenges accompanying any company at its scale. The law of large numbers makes maintaining triple-digit growth rates mathematically difficult. Simultaneously, competitive dynamics in beauty-tech continue intensifying.

However, the company’s strategic positioning around artificial intelligence suggests management believes significant runway remains. The investment in AI capabilities and digital marketing, while pressuring near-term earnings expectations, appears designed to establish defensible competitive advantages. Whether this bet pays off will ultimately determine whether Oddity’s share trajectory returns to reflecting its underlying business momentum—or whether the disconnect persists.

For investors considering entry points, the fundamental question remains whether current valuations adequately price in both the risks of slower growth acceleration and the potential rewards from AI-enhanced product expansion in the global beauty and wellness markets.