What is driving renewed attention on Olaplex Holdings (OLPX)?

Olaplex Holdings (OLPX) is back on investors’ radar after several years of pressure, with annual sales declining 17.3% and earnings per share falling 50.8%, while heavier investment has reduced free cash flow margins.

At a share price of US$1.53, Olaplex’s recent 30 day share price return of 13.33% and 90 day share price return of 44.34% suggest momentum has picked up. However, the 3 year total shareholder return of a 77.20% loss highlights how long term holders have still experienced substantial value erosion.

If Olaplex’s recent swings have you reassessing your options, this could be a good moment to broaden your watchlist with fast growing stocks with high insider ownership.

With the share price at US$1.53 and some valuation models suggesting a discount, alongside a recent rebound following substantial long-term losses, the key question is whether this represents a buying opportunity or if potential future growth is already reflected in the price.

Most Popular Narrative: 20.3% Undervalued

With Olaplex Holdings last closing at $1.53 against a narrative fair value of about $1.92, the most followed view frames the shares as undervalued, hinging on a specific set of growth and profitability assumptions.

The revitalized global brand campaign, updated digital storytelling, and strengthened direct-to-consumer capabilities (for example, revamped website, focused promotional cadence, and enhanced data/AI tools) are unlocking scalable e-commerce opportunities and lowering customer acquisition costs, supporting topline growth and operating margin improvement.

Curious what kind of revenue trajectory, margin rebuild, and future earnings multiple support that gap between price and fair value? The full narrative spells out those assumptions in detail, using an 8.14% discount rate to bring them back to today.

Result: Fair Value of $1.92 (UNDERVALUED)

However, there are still real pressure points, including weaker specialty retail sales and slimmer EBITDA margins, which could easily challenge this upbeat fair value story.

Another Take: P/S Ratio Flashes Caution

While our model-based fair value suggests Olaplex is undervalued, the market is telling a different story when you look at the P/S ratio. At 2.4x sales, the shares trade well above both the US Personal Products industry at 0.9x and peers at 0.4x, and even above an estimated fair ratio of 1x. That gap points to meaningful valuation risk if sentiment cools or expectations reset.

Build Your Own Olaplex Holdings Narrative

If you see the story differently or simply prefer to test the numbers yourself, you can build a custom view in just a few minutes with Do it your way.

A great starting point for your Olaplex Holdings research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.