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Revisiting This Forgotten (and Highly Profitable) IPO
One of my favorite areas to check when looking for new positions is recently public companies that now have a few earnings calls under their belt.
Often new companies are roughed up by the market in their first year as a publicly traded company (or are highly volatile at a minimum) -- yet their investment thesis often remains intact.
That appears to be the case with $OLPX and its patent-protected hair rejuvenation products.
Down around 50% from its IPO highs, here are a few things that make Olaplex interesting:
- Net Promoter Score of +71
- 100+ patents averaging 13 years of protection remaining
- 2.3M Instagram followers (compared to 28.1M for Apple) -- highest of its peers
- #1 hair care brand in the US with 7 of the top 10 Prestige hair products
- Brand awareness grew 22% in Q2 2022 while recording 1B views on TikTok
- FY 2021 sales grew 112% -- 1H22 +47% -- Q2 2022 +39%
- A profit margin of 42%, FCF margin of 35%
- Trades at 34x FCF and 31x earnings
Growth is decelerating but still very promising. So at these valuations, I can't help but start to get interested.
What do you all think?
Thoughts on Olaplex?
37%I'm buying this.
12%Watchlist and learn.
12%Gross, consumer discretionary.
37%Other, comment below.
8 VotesPoll ended on: 9/6/2022
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